Category: University of Washington School of Law

Grab Your Free Monitor Stands Before They Disappear! . . . Is The Phone Book Going Extinct?

Susuk Lim

Credit “Obsolete, the Book,” http://obsoletethebook.com/post/712686131.

When was the last time you looked through a physical yellow pages directory to find the local pizza joint’s number? Probably a long, long time – such local inquiries, whether one is looking for the hardware store’s hours or ordering up some greasy prandial delight, are now the domain of the Internet. Recognizing the potential financial and environmental benefits to killing the phone book, several states have recently passed laws allowing land-based phone line carriers to stop distributing paper directories and only make them available on customer request.

Even the National Yellow Pages Association and the Association of Directory Publishers (ADP) seem to have gotten the hint; on February 1, 2011, they setup a website where users can opt out of all paper directories with a single registration (the previous incarnation of the page merely provided links to individual directory publishers).  Now that states, publishers, and the public have aligned, it seems that the fate of the lovable yellow doorstop is sealed.

Not so fast.  In the prevailing spirit, the city of Seattle passed an ordinance last year, imposing licensing and reporting requirements on phone book distributors, as well as assessing annual and per-book fees and requiring them to heed a local opt-out registry. Distributors failing to abide by any part of the ordinance are nailed with a substantial per-violation penalty. Directory publisher Dex Media West did not take long to file a complaint in federal court. Dex Media West, Inc. v. City of Seattle, No. 10-cv-01857, W.D. Wash., complaint filed Nov. 15, 2010. Dex claimed that Seattle violated its First Amendment right to free (commercial) speech by too narrowly targeting yellow page directories for regulation, when other, similar publications (e.g. magazines rife with advertisements, junk mail) were left untouched.  It also averred that the ordinance violated the Commerce Clause by excluding locally-published directories from the ordinance.

On January 13, 2011, Dex Media moved for summary judgment on these grounds. Dex details several constitutional problems with the ordinance’s construction.  First, as previously noted, the ordinance only targets yellow page directories, rather than unsolicited publications as a whole, and in any case does not rationalize how harms caused by directories are any different from other, similar publications. Second, Seattle bowed to local business demands that local directory publishers be exempt from the ordinance’s requirements, which seems like an almost textbook Commerce Clause violation.  Third, and perhaps most practically, the ordinance’s opt-out scheme duplicates an existing, voluntary, and national opt-out scheme, and could encourage other states or cities to do the same, which would paradoxically make it more difficult for a consumer to opt out because of the resulting patchwork of requirements.

Note the date the motion was filed – January 13, 2011.  The ADP’s improved national opt-out registry was launched on February 1, making the Seattle opt-out scheme even more duplicative than Dex had originally argued.  Regardless of the viability of Dex’s constitutional arguments, which seem persuasive, one wonders how the city of Seattle can now argue that the ordinance has any real benefit for the public it purports to protect.  In fact, in its January 31 response and cross-motion for summary judgment Seattle is silent on how the ordinance’s regulation and licensing scheme, or its local opt-out mechanism, is any better at relieving the public burden caused by printed yellow page directories than an existing national opt-out scheme. Rather than argue why the ordinance is useful, Seattle expends most of its verbiage on why the ordinance is constitutional.  Courts are practical institutions. They, too, will likely inquire why Seattle is insistent on protecting a seemingly purposeless law.

This seems to be a case in which a city government, swept along by a tide of public sentiment, attempts to legislate away a problem without adequately considering how best to do so.  One might argue that given the printed yellow page directory industry’s inevitable demise (incidentally, supported the industry’s own members, who have moved on to bigger and better things), Seattle should have just left well enough alone.

Until the case is resolved, Seattle residents can simply continue to ignore the moldy stacks of banana-yellow phone books strewn about their front stoops when ordering their pepperoni pizzas.

Washington Journal of Law, Technology & Arts Publishes Winter Edition

University of Washington School of Law has published the Winter 2011 issue of the new Washington Journal of Law, Technology & Arts, the nation’s first student-run electronic law journal focusing on technology, commerce, and artistic innovation.

The Washington Journal of Law, Technology & Arts publishes concise legal analysis aimed at practicing attorneys. The Journal publishes on a quarterly basis. This quarter’s edition includes five articles on topics such as:

  • The “Three Strikes” Policy in Korean Copyright Act 2009
  • Antitrust Liability for Denying the Authenticity of Artwork
  • Evaluating an Investor’s Secondary Copyright Infringement Liability
  • Exportability’s Effect on Process Patent Enforcement
  • Copyright Protection of Short Portions of Text in the United States and European Union

This issue’s lead article, The “Three Strikes” Policy in Korean Copyright Act 2009: Safe or Out?” is written by Sun-Young Moon, a Professor of Law at Sookmyung Women’s University in Seoul and Daeup Kim, an L.L.M. candidate at Sungkyun Kwan University in Seoul. The article describes how Korea revised its copyright laws to protect intellectual property from infringement. The new Korean Copyright Act allows the Minister of Culture, Sports and Tourism to issue orders to delete infringing content, suspend accounts, and allow the Korea Copyright Commission to issue correction recommendations. Under the “three strikes” policy, accounts are only suspended after three warnings. Online service providers can be fined up $9,000 USD for failing to respond to a correction recommendation.

Korea’s new “three strikes” policy has raised several constitutional concerns including free speech violations, violation of separation of powers, and due process concerns. Moon and Kim argue, however, that the policy has sufficient protections to ensure constitutionality. Nevertheless, the authors recommend several policy revisions to make the new law more effective. First, preventive education about the cost of copyright infringement and the lawful alternatives to infringement could be used before shutting down internet service with a correction orders. The goal would be to intervene early to prevent future repeat infringement. Second, the authors recommend no prosecuting youth or those who are infringing on copyright for personal use. Instead they recommend imposing training and education obligations on non-commercial infringers.

Gareth S. Lacy, the Editor-in-Chief of the Washington Journal of Law, Technology & Arts, wrote this issue’s second article, “Standardizing Warhol: Antitrust Liability for Denying the Authenticity of Artwork,” which analyzes the legal battle between an art collector, Joe Simon-Whelan, and the Andy Warhol Art Authentication Board. Simon-Whelan sued the Board after being told his painting was not an authenticate Andy Warhol painting, an opinion that rendered the work of art virtually worthless. Simon-Whelan alleged the Board refused to certify the painting to drive up the value of the Warhol Foundation’s own art collection.

The article describes how art collectors have been suing experts for decades after receiving adverse opinions on the authenticity of artwork, but this is the first significant case to involve antitrust law. What makes this recent legal battle interesting is that Simon-Whelan claimed the Board was violating antitrust laws by colluding with the Foundation to drive up the value of the Foundation’s art collection. No such legal claim had ever survived the preliminary stages of litigation. In short, Simon-Whelan v. Andy Warhol Foundation for the Visual Arts, is important precisely because the case proceeded to discovery and allowed Simon-Whelan to probe the foundation’s inner workings. Lacy also discusses how antitrust law outside the art world could apply to litigation over the authenticity of artwork.

James Proctor, author of LTA-Blog’s first “Freshly Pressed” blog post, wrote this issue’s third article, “Capital Punishment”: Evaluating An Investor’s Secondary Copyright Infringement Liability after Veoh. The article discusses whether investors might be liability for copyright infringement based on the activities of the company in which they invest. In UMG Recordings, Inc. v. Veoh Networks, Inc., the U.S. District Court for the Central District of California considered claims that investors in a privately-held corporation were secondarily liable for copyright infringement.

Proctor explains that Veoh describes how investors might be liable for copyright infringement committed by the company in which they invest. Nevertheless, the decision is fact-specific and offers incomplete guidance for investors. For example, the court found that the investor in the case did not control the infringing activities or reap direct financial benefits. In addition, the court based secondary liability on subjective concepts such as “control,” “ability to supervise,” and “encouragement to infringe.” Proctor recommends obtaining representations and warranties from prospective investment targets as well as negotiating appropriate indemnification in case the source of investment is later found to be committing copyright infringement.

The fourth article in this issue, Exportability’s Effect on Process Patent Enforcement: Why § 271(f) Export Restrictions Do Not Apply to Intangible Process Claims, is written by Homer Yang-hsien Hsu, the Editor-in-Chief of the Law, Technology & Arts Blog. Hsu describes a recent federal court decision that held process patents–patents protecting how something is created, rather than a tangible creation itself–are not protected by a federal statute that prohibits U.S. manufacturers from shipping components overseas to avoid U.S. copyright law.

Hsu explains how Congress enacted 35 U.S.C. § 271(f) to prohibit shipping patented devices in smaller components for assembly overseas. But it has been unclear whether § 271(f)—which clearly applies to physical things—also applied to process claims. Hsu describes how the recent decision Cardiac Pacemakers, Inc. v. St. Jude Med Inc., held that § 271(f) does not apply to process claims because a component of a process claim is an intangible step that cannot be physically supplied. Hsu discusses  the implications of this decision for those who hold process patents in the United States. Hsu concludes the although § 271(f) offers limited protection against those who might use process patent information overseas, patent attorneys might still be able to obtain some protection by seeking out tangible combinations of elements that occur during intangible processes.

This issue’s fifth article, How Much is Too Much? Copyright Protection of Short Portions of Text in the United States and European Union After Infopaq International A/S v. Danske Daglades, is written by Connor Moran, the Journal’s Associate Editor-in-Chief. The recent case Infopaq International A/S v. DanskeDagblades Forening, decided by the Court of Justice for the European Union, held that short excerpts of copyrighted material, which could be lawfully copied in the U.S., would be illegal copyright infringement in European Union member states. In the United States, copying short phrases only infringes on copyright if the phrase is  particularly unique. But the European Union Information Society Directive grants exclusive right to even partial reproductions.

Moran’s article examines the standards for copyright infringement of small sections of text in the United States and European Union after Infopaq. In the Infopaq case, the European Court of Justice read the Directive to apply to eleven-word sentence fragments so long as those fragments demonstrated the author’s intellectual creation. Moran concludes that E.U. copyright protections may be stronger than those in the United States. In the U.S. there is a defense known as the de minimis defense, which often permits copying short fragments of text so long as the phrase is not especially unique. By contrast, the European Court of Justice did not recognize such a defense, opening the door to national courts finding illegal reproduction when fragments of sentences are copied.

The Winter 2011 issue demonstrate the Journal’s commitment to publishing cutting-edge legal analysis on a broad range of issues. The Journal is the nation’s first technology and law journal that also publishes articles involving the arts. This new focus allows the Journal to play a key role in furthering the University of Washington School of Law’s reputation as a center of innovation and path-breaking legal research.

The Journal accepts outside submissions from students, law professors, and practicing attorneys. For more information about the Washington Journal of Law, Technology & Arts please visit their new website. Download the entire Winter 2011 issue of the Washington Journal of Law, Technology & Arts or visist www.law.washington.edu/wjlta for invidual articles.

Egypt’s Internet Shutdown: Was it Legal?

Credit: Wikipedia

Connor Moran

In an apparently unprecedented decision, the embattled government of Hosni Mubarak shut down all Internet connections in Egypt after midnight on Thursday, January 27. An unanswered question is whether Egypt had legal authority to take this unprecedented action. LTA-Blog conducted research on Egyptian law to determine whether the government had legal authority for this Internet shutdown.

It appears Egypt’s Internet shutdown may have been authorized by Egypt’s “Emergency Law,” (Law No. 162 of 1958), which grants broad powers to the President during emergencies. Although the law was designed for particular states of emergency, the Act has been in effect continuously since October 1981 when Sadat was assassinated. Before that, the law was effective from 1967 to 1980. A copy of the 1958 Act is available in Arabic at: http://www.emerglobal.com/lex/law-1958-162.

Among other powers, Article 3 of Law No. 162 of 1958 grants the President authority to confiscate, suspend or shutdown the press and all means of communication. For more information about this authority see A. Seif el-Islam, Exceptional Laws and Exceptional Courts, in Egypt and Its Laws 359, 365 (Nathalie Bernard-Maugiron & Baudouin Dupret, eds. Kluwer Law International  2002).

On May 11, 2010, Egypt renewed the declaration of emergency for two years under the Act. In an effort to reduce controversy, the declaration explicitly limited the President to use powers only as necessary to combat terrorism or drug trafficking. The renewal did not grant the President all powers provided in the 1958 law. In particular, the declaration did not grant the power to impose censorship or shut down newspapers or other media outlets. It therefore appears Egypt was acting without authority under the May, 2010 declaration when it shutdown the Internet. It is possible, however, that the President took some additional step under the 1958 Act to declare a state of emergency. It remains unclear whether President Mubarak actually took such steps.

The Arabic text of the May 11, 2010 declaration is available here: http://www.ournormandy.com/forum/showthread.php?t=68412 (scroll down below all photographs).English language media reports also mention the limitation of authority with regard to news outlets, as well as opposition claims that these changes are cosmetic. In light of these express limitations in the current emergency declaration, the source—or even existence—of legitimate legal authority to shut down internet sources is unclear.

According to James Cowie, the co-founder and chief technology officer of Renesys, an IT company whose blog post became a key source of information, the shutdown did not happen in a single moment; no single “switch” was flipped. Instead, the shutdown happened in 20-minute intervals, suggesting the government contacted service providers one-by-one.

Egypt’s fiber-optic cables continued to run data through the country during the shutdown. But Egypt itself was cut off from the international flow of information. This suggests Egypt went after the four major Internet service providers, rather than, for example, cutting the cables at the border.

At least one blogger has looked at the technical barriers to such a comprehensive shutdown and has explored the likelihood of such a shut-down occurring in another country, or even a Western democracy. Vittorio Coalo, Chief executive of the U.K.’s Vodaphone, the  majority owner of Egypt’s largest mobile carrier, made comments Friday confirming the shutdown was carried out under color of law. Coalo said Egyptian officials asked mobile operators to shut off networks and stated this request was “legitimate” under Egyptian law.

(Thanks to Connie Cannon for assistance with translation and Egyptian research.)

The Future of Textbooks in a Digitized World

James Proctor

In January 2011, California start-up company Kno, Inc. announced upcoming beta testing of single and two-screen e-book readers specifically designed for use with electronic textbooks. The devices, consisting of 14-inch screens, replicate the size and appearance of a standard hard-copy textbook and allow users to apply “traditional” study techniques such as highlighting and margin notes. Kno intends to commence selling both products in early 2011.

E-books are not without drawbacks, and their lack of accessibility for the blind has already been the subject of a lawsuit against Arizona State University settled last year. However, the recent proliferation of new general-purpose readers, growing public discontent with the textbook industry, and a California law requiring electronic textbooks in all primary and secondary schools by 2020 indicate that the days of a hard-copy textbook being the primary instruction aid are most likely numbered.

Credit: Penarc

The digitization of any creative work raises issues of copyright protection. Although publishers have taken legal action against companies that facilitated illegal copying and distribution of textbooks without permission, most infringing activity has been the product of labor-intensive preparation such as scanning of hard-copy textbooks. As a result, the amount of infringement has not been high enough to be a significant concern to publishers. The digitization of textbooks, however, will likely revolutionize the delivery of textbooks in the same manner that digital music changed the recording industry. Similar to an .mp3 music file, a digital book never deteriorates and costs almost nothing to reproduce and distribute to other users. Without controls on this distribution process, a primary purpose of copyright protection — providing a financial incentive for authors to create original works — will be easily defeated.

The music industry’s resistance to the introduction of digital music is instructive, though not completely applicable, for publishers contemplating the growing popularity of e-books. Similar to the publishing industry, the Recording Industry Association of America (RIAA) was successful in shutting down the most popular peer-to-peer file sharing service provider. However, similar service providers still exist, while others have managed to avoid jurisdiction by locating their domains beyond American jurisdiction. RIAA’s real success in combating copyright infringement came when it started targeting and suing individual consumers, often for astronomical sums of money. The publishing industry, however, is not likely to fare as well in pursuing legal remedies as did the music industry.

Unlike RIAA, however, textbook publishers will not be as likely to slow illegal downloading by taking legal action against individual consumers. RIAA reported in 2004 that the music users it sued had downloaded an average of 800 songs each. A typical student, on the other hand, may use 3-5 textbooks a semester, some of which may not be downloaded. Such low-volume lawsuits would probably not deter other students to a degree that would make the publishers’ considerable investment in legal costs worthwhile.

So how should the textbook industry deal with the advent of digitization? The best answer may be to embrace the technology and develop business models that would ensure continued profitability. The newspaper industry’s slow reaction to the advent of internet-based news services still threatens its existence, but newspapers are starting to take action to remain viable by streamlining operations (most notably, by singling up publications in most metropolitan areas), concentrating on local features and news, and introducing websites featuring advertising space. In similar fashion, publishers should improve their processes in order to successfully implement an e-book operation. For example, electronic publishing should enable publishers to eliminate distribution overhead and some production costs. Authors could collaborate on open source textbook projects in order to reduce costs and improve textbook quality. Advertising could be built into each publication. In addition, technology could be used to make electronic books non-transferable by adding copy protection or charging the user a per-use fee.

In sum, the ability of publishers to embrace digital technology early by implementing effective business models may enable them to profit from the growth of e-books rather than be victimized by it.

Arbitration Over Free Phones: A Costly Challenge to Federal and State Arbitration Laws

Kendra Rosenberg

The United States Supreme Court heard arguments in the case of AT&T Mobility v. Concepcion on November 9, 2010.  This case brings unexpected phone charges to the forefront of a consumer rights issue–the ability to engage as a class in arbitration with a major national corporation. The briefs and arguments before the Court highlight arguments that have been bubbling up across the country between consumer rights groups advocating for the availability of class action claims and proponents of consumer’s freedom to enter into contracts, including those with arbitration agreements.

Credit: Petr Kratochvil

In this case, the plaintiffs signed two-year contracts with AT&T and received new, free phones as part of the contractual agreement. But instead of the phones being free, the Concepcions were charged $30.22 in sales tax. The Concepcions brought this lawsuit arguing first, fraudulent misrepresentation of the “free” phones.  Second, the plaintiffs dispute the validity the arbitration clause present in the contract they signed with AT&T that requires individual arbitration of all claims against the company.  The plaintiff’s contend this type of arbitration clause is unconscionable because it does not allow a class–a group of plaintiffs–to arbitrate their similar complaints against AT&T together. AT&T argues this arbitration clause is properly part of the contractual agreement between them and their consumers and that state contract law is preempted by the Federal Arbitration Act (“FAA”).

The FAA favors arbitration agreements, stating arbitrations “shall be valid, irrevocable and enforceable save upon such grounds as exist at law or in equity for the revocation of any contract.”  Meanwhile, state laws may provide greater protection to consumers though, and may invalidate this type of contractual provision.

This case arose in federal district court in the Southern District of California, where the trial judge found the contract including the class waiver provision of the arbitration agreement is unconscionable under California law.  Further, the court found the California unconscionability law is not preempted by the FAA. AT&T timely appealed. (The district court consolidated the case of AT&T Mobility v. Concepcion with Laster v. AT&T. See 2008 WL 5216255).

The Ninth Circuit also held the arbitration clause was invalid under California law and applied a three-part test in Laster v. AT & T Mobility LLC to determine whether the class action waiver in a consumer contract was unconscionable. First, the agreement was a contract of adhesion.  Second, the disputes between the contracting parties involved small amounts of damages (here the damages are $30.22 for the sales tax charged on cell phones AT & T advertised were “free).  Third, AT & T used its superior bargaining power to carry out a scheme deliberately to cheat large numbers of consumers out of individually small amounts of taxes. The Ninth Circuit held the class action waiver of arbitration “unconscionable” and thus, unenforceable under California contract law.  The Ninth Circuit further held the FAA did not preempt California unconscionability law.

The core issue before the Supreme Court is whether state law can render class action waivers contained in arbitration clauses unenforceable, or whether the Federal Arbitration Act prohibits states, California in this case, from requiring class arbitration to be available for plaintiffs.  A broad holding for AT & T may allow companies to use this type of class action waivers in standard form contract, thus insulating major corporations form class action lawsuits.  A ruling against AT & T may reinforce state’s ability to regulate waivers of class action arbitration, thus creating jurisdictional differences regarding the availability of class actions.

This issue is important because ultimately the court will determine whether states can enforce greater consumer protection policies and condition the use of arbitration clauses on the availability of class action arbitration, or if federal law preempts the state’s ability to enforce these types of conditions.