Back in July, there were interesting reports coming out of Vancouver Canada where a price war was raging. Some suggested the Shaw move to charge a mere $9.95 per month for high speed internet, phone and TV was little more than an attempt to destroy a local fibre ISP. From the report at the time:

Canadian cable operator Shaw has dropped a bit of a pricing bomb on consumers and competitors in Vancouver. The operator is offering some unheard of deals, including 15Mbps service with a 100GB cap for $9.95 ($9.13 US), 200 channels of TV service (with 25 high-definition channels) for $9.95, or digital phone service with free installation, also for $9.95 a month. The catch? You have to live in an area served by Novus Entertainment, a Canadian fiber to the home operator that’s currently wiring Vancouver apartment buildings.

Novus offers symmetrical 10Mbps service for $37.50 a month (110GB cap), 30/10 Mbps service for $89.95 (200GB cap), or 50/10Mbps service for $179.95 (360GB cap). Given Novus’s small size of just 9,000 subscribers, Shaw can essentially give service away in Novus markets and just eat the losses.

Unfortunately, if you’re a Shaw customer in any other area, such amazing deals aren’t available to you. In fact, in some instances, you’re paying nearly $150 per month more.

At the time, Novus was unsurprisingly upset over this and launched a campaign saying that Shaw users from across the country should be allowed the same deal of ten bucks a month. It ultimately sparked a lawsuit in the B.C. Supreme Court as well as a complaint in the Competition Bureau.

Shaw had even sent “street teams” to the residents asking if they were Novus customers, and if they were, tell them about the Shaw deal.

The CBC is now reporting that Shaw has responded to the accusations of anti-competitive practises and sued Novus for defamation.

Calgary-based Shaw, which has more than two million customers, mostly in Western Canada, has fired back by filing a defamation lawsuit against Novus in B.C. Supreme Court.

Shaw president Peter Bissonnette said Novus is spreading misinformation. The offer isn’t just targeted at Novus customers but residents of West Vancouver in general, which is a “highly competitive” market.

“They’ve publicly stated in the past that they’re going to become the bane of the life of Shaw,” Bissonnette said. “True to their word, they’ve embarked on this defamation campaign.”

It’s clearly a sort of David and Goliath sort of situation. Shaw is one of the three large ISPs stretched across Canada while Novus is a smaller Vancouver based company. Already, North American markets have been notorious for monopoly-like problems in the ISP industry. Many Canadians were reminded of this problem when an OECD report ranked Canada as having the 3rd worst cellphone rates in the world only outranked by Spain (2) and the United States (1). Some have argued that Canada’s landmass is the biggest problem for these prices, but given that the United States has a smaller landmass and a higher population density and still outranked Canada, that left that particular argument in limbo.

It’ll be interesting if the OECD report plays any roll in this latest price war, but either way, it’s already gotten ugly between the two companies.

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The appeals process takes time. That’s why we haven’t heard much from the Jammie Thomas case in a few months now. Back then, many Americans saw the award of $1.92 million as shocking and another reason to see the copyright laws as a departure from reality. The verdict even made waves during the Canadian copyright consultation as major reason to not go down the lawsuit road while considering new copyright laws.

That’s what, for many, makes this latest development all the more shocking.

According to a legal brief filed by the Department of Justice, the Department of Justice is arguing, “If it is necessary to reach the constitutional question to resolve defendant’s motion, then defendant’s motion should be rejected because Conress’ carefully crafted statute satisfies the Due Process Claus.”

They further argue, “The current damages range provides compensation for copyright owners because, inter alia, there exist situations in which actual damages are hard to quantify. Accordingly, the statutory range specified by Congress for a copyright infringement satisfies due process.”

In other words, they argue that because there is little to no evidence that points to actual harm, the damages should be this high in the first place and, therefor, not unconstitutional to fine a young woman $1.92 million for sharing non-commercial copies of 24 songs.

In short, philosophically speaking, the Department of Justice’s argument is this: Actual damages is hard to show. Congress made a copyright law with a given range of damages. Therefor Thomas cannot claim damages are unconstitutional.

There’s probably hundreds of ways to point out why this argument fails. Saying that actual damages are hard to claim is irrelevant to how constitutional the award is. So premise one doesn’t work. Congress have passed copyright laws, but laws can be overruled by the constitution. If congress passed a law that dictated that no more elections shall be had and the current party must stay permanently in power, the constitution would overrule it. Since the constitution has power over lawmaking, premise two is false. Therefor, the DoJ argument fails miserably here.

The bigger concern here is that this is a plain example of a government backing a few particular corporations. Why is the government trying to interfere in this particular case – especially helping the RIAA gang up on someone who has little to no hope in paying off the $1.92 million award in the first place. One wonders why the RIAA needs the whole government backing their case in the first place? Was it getting difficult to fight in the first place and has to resort to the whole government with their unlimited resources to help win the case?

In any event, the government backing the RIAA in a lawsuit may be more disturbing than the fact that the defendant was fined $1.92 million for sharing 24 songs non-commercially.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

There was an interesting development from the hugely popular video sharing site. A report from Billboard says that SPPF has sued YouTube saying that over 100 music videos from their catalogue appeared on the site. All this after a previous episode where SPPF demanded the content be taken down (which, consequently, were taken down) only to have the video’s be re-uploaded by their users.

YouTube issued a statement saying that SPPF didn’t use their content ID system which prevents others uploading similar content.

While using the content ID system may have helped, one user discovered at one point that the system is far from perfect. Regardless, one might wonder if the fact that the labels decided not to use the system would hurt them in any legal case against the site.

Of course, there was another interesting tidbit BillBoard uncovered:

Meanwhile, SPPF also unveiled results for 2008, with a 14.9% increase in income to €14.5 million ($20.2 million). The rise was mainly due to various exceptional items and to an increase in music video income, thanks to the growth of digital terrestrial television (DTT) channels.

If there was an argument to be made that having an unauthorized video uploaded on YouTube will do harm for record labels, the fact that their revenues increase will not likely help that argument.

Of course, SPPF is far from the only entity to sue the website. Last year, French Broadcaster TF1 sued YouTube for €100 million. That was on top of the Italian Media Companies half a billion Euro lawsuit. Lawsuits, at one point, became so frequent that some observers renamed the site “SueTube” given that the site seemed to be, at that time, attracting a large number of lawsuits.

[Hat tip: Open Rights Group]

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The Jammie Thomas trial took a shocking turn for the worse. During the short re-trial, a jury found Jammie Thomas liable for wilful copyright infringement for sharing 24 songs and fined her $1.92 Million. This latest verdict is fresh blow to file-sharers within the United States.

This doesn’t mean the end of the road for the trial. Already, the EFF is suggesting that the damages awarded might be considered unconstitutional:

First, the Supreme Court has made it clear that “grossly excessive” punitive damage awards (e.g., $2 million award against BMW for selling a repainted BMW as “new”) violate the Due Process clause of the U.S. Constitution. In evaluating whether an award “grossly excessive,” courts evaluate three criteria: 1) the degree of reprehensibility of the defendant’s actions, 2) the disparity between the harm to the plaintiff and the punitive award, and 3) the similarity or difference between the punitive award and civil penalties authorized or imposed in comparable situations. Does a $1.92 million award for sharing 24 songs cross the line into “grossly excessive”? And do these Due Process limitations apply differently to statutory damages than to punitive damages? These are questions that the court will have to decide if the issue is raised by Ms. Thomas-Rasset’s attorneys.

Second, recent Supreme Court rulings suggest that a jury may not award statutory damages for the express or implicit purpose of deterring other infringers who are not parties in the case before the court. In other words, the award should be aimed at deterring this defendant, not giving the plaintiff a windfall in order to send a message to others who might be tempted to infringe. It’s hard to know without having been in the courtroom, but if the record industry lawyers urged the jury to “send a message” to the millions of other American file-sharers out there, they may have crossed the constitutional line.

For more on the details of these constitutional doctrines, I recommend a recent article by Prof. Pamela Samuelson & Tara Wheatland, Statutory Damages in Copyright Law: A Remedy in Need of Reform (full disclosure: Prof. Samuelson is a member of EFF’s board of directors). For those who want a shorter summary of the debate in podcast form, I recommend Prof. Douglas Lichtman’s IP Colloquim episode entitled Statutory Damages and the Tenenbaum Litigation. While I disagree with some of Prof. Lichtman’s conclusions, his guests do a wonderful job summarizing the relevant cases and concepts.

I assume these arguments will first be submitted to the trial judge in post-trial motions. After all, this judge has already indicated that he found the previous $220,000 award to be “unprecedented and oppressive.”

As we’ve already noted in a previous article:

Already, Jammie Thomas lost her case back in 2007 where she was fined $222,000 for sharing 24 songs on the FastTrack network. Then, in a surprising turn of events, Judge Davis threw out the case because of an error on his part. The main reason for the case being thrown out was because he instructed the jurors that merely placing copyrighted works in a shared point constitutes copyright infringement. Realizing this error, he threw the case out saying that steps to allow distribution does not, in and of itself, constitute copyright infringement. In short, it was a “manifest error in law”. The record labels were not happy about the turn of events. They consequently appealed the mistrial ruling saying that the judge had correctly instructed the jurors in this case and that the trial was legitimate. Unfortunately for the major record labels, the judge denied that appeal – that paved the way to this trial many had expected to go over better than her original $222,000 fine. Unfortunately, it seems that this case has actually taken a turn for the worse this time around. One hopes that the new appeal will work out better.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

Early on this month, lawyers working on Jammie Thomas’ defence argued that the evidence gathered by Media Sentry should be barred from the case because the evidence was gathered illegally. From our previous report discussing the motion:

“MediaSentry collected the evidence against Jammie Thomas in violation of the
Minnesota Private Detective Act and the federal Pen Register and Trap and Trace Devices Act and Electronic Communications Privacy Act of 1986,” reads the motion. “These violations were crimes under Minnesota law and federal law.”

The case could set a very interesting precedent because it could confirm or deny the legitimacy of the legal threats the copyright industry had issued in years past. Tens of thousands of US residents have received legal threats saying that if they don’t pay a few thousand dollars, then the copyright industry would take them to court where they would face jail time and hundreds of thousands of dollars per infringement. All the way up to this point, no case has reached a verdict in the United States.

Already, Jammie Thomas lost her case back in 2007 where she was fined $222,000 for sharing 24 songs on the FastTrack network. Then, in a surprising turn of events, Judge Davis threw out the case because of an error on his part. The main reason for the case being thrown out was because he instructed the jurors that merely placing copyrighted works in a shared point constitutes copyright infringement. Realizing this error, he threw the case out saying that steps to allow distribution does not, in and of itself, constitute copyright infringement. In short, it was a “manifest error in law”. The record labels were not happy about the turn of events. They consequently appealed the mistrial ruling saying that the judge had correctly instructed the jurors in this case and that the trial was legitimate. Unfortunately for the major record labels, the judge denied that appeal, allowing for the new trial that will take place tomorrow.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

One of the akiles-heel’s of the copyright industry’s legal war on file-sharing has always been getting a sufficient amount of evidence to prosecute alleged copyright infringers. In Canada, for instance, when the RIAAs Canadian arm known as the CRIA filed lawsuits against file-sharers, an IP address wasn’t sufficient evidence. A similar thing with regards to lack of evidence has reportedly happened in Germany recently.

Firebird77 of Gulli wrote in recently to inform us of this development (Google translated). If the Google translation from German to English seems a bit confusing, he was kind enough to give us a brief summary for us.

Essentially, this is what had happened. A German file-sharer received a cease and desist order from the German law firm Schutt & Waetke on behalf of CDV-Entertainment, a copyright holder of video games. After several reminders, the lawyer handed the case over to Infoscore. After Infoscore issued a few final final demands, the case was then handed over to another law firm known as Haas & Partners. That law firm sent an additional warning letter before they demanded a court to issue a default summons. Firebird77 tells us that this particular part of the development is new in Germany. Several users then contradicted the order for a default summons, but the contradictions lost.

At this point, the alleged copyright infringer was issued an enforcement order. That was when the alleged copyright infringer issued a contradiction. So, the court ordered Haas & Partners to substantiate their claims. After receiving this order from the court, the lawyers on the case withdrew their claim to the surprise of some who are watching this case.

It’s unclear whether or not this could be a new strategy for file-sharers in Germany, but if these events play out in future cases, the copyright industry in Germany could have a brand new obstacle in their path to try and stop alleged copyright infringers in Germany. Still, the likelihood of these events from repeating every time could also be very slim. In any event, it seems to be a new victory for file-sharers and a surprising blow for the copyright industry.

Special thanks to Firebird77 for passing this along!

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

Late last year, Wikileaks obtained a copy of one of the extortion letters sent by the infamous law firm Davenport Lyons. The law firm, at the time, had been sending tens of thousands of these letters which threatened to take the recipients to court if they don’t pay just over 500 pounds. The original goal was to deter alleged copyright infringers, but in a strange twist of fate, the law firm is now actively trying to censor the letter itself claiming that the letter is protected under British copyright law.

The legal threat letters themselves contain a hash value, and IP address and a time stamp that is being used as evidence – flimsy evidence according to many people who have observed the legal side of file-sharing. The reason it is seen as flimsy is that a filename can be called anything and still have the same hash value. Second of all, there is no evidence provided that verified that the file name matched what the actual work was. For all we know, it could have been a 5 minute porn clip rather than a music video. Thirdly, there’s no evidence to suggest that an IP address is linked to an individual. The computer could be used by someone other than the owner of the connection. There could be a wifi connection that other users, including unauthorized ones, could be using that IP address. Finally, a time stamp doesn’t contribute much into proving that a copyrighted work has been uploaded. The alleged incident in question happened over BitTorrent, but no website was given, so who really knows where the evidence was gathered in the first place?

The turn of events seems to resemble the Recording Industry Association of America (RIAA) deciding that they don’t want the trial broadcasted over the internet. The copyright industry said that the whole purpose of file-sharing lawsuits is to educate the public, yet objected to idea that the case should be broadcasted over the internet. The same sort of contradiction can be seen in the Davenport case. The whole idea is to educate the public, but now they don’t want their own letters being published, claiming it’s copyright infringement.

One might argue that the reason that Davenport Lyons don’t want the letters published in the first place is because they don’t want their letters subject to public or any real legal scrutiny. It’s much easier to attack a single individual singled out rather than attacking a single individual with the public sphere watching. It’s little wonder why the copyright industry has been seen as a bully throughout the years really. If they truly feel they are in the right, why the need to hide their activities in the first place?

Three accusations. Three assumptions of guilt. Is that enough to get your connection terminated permanently and get you banned from the internet? According to a new New Zealand law that will come into force, it is. It wasn’t like New Zealanders went down without a fight, ISPs, technology experts and activists alike protested until the very end with their government ignoring their calls and passing what may be one of the riskiest copyright laws the world has ever seen.

The EFF highlighted the protest website developers are organizing to protest the new law. The protest is known as the internet blackout where participants turn their icons black to show their support for the protest against the “guilt upon accusation law” The meaning, of course, is that New Zealands internet would go black thanks to the new copyright law.

There is even a remix contest where users can remix the Copywrong Song by CFF, Mike Corb and Luke Rowell.

The EFF offers some details of what the S92a law really is:

Section 92A comes into force on February 28th, and states:

(1) An Internet service provider must adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the account with that Internet service provider of a repeat infringer.

(2) In subsection (1), repeat infringer means a person who repeatedly infringes the copyright in a work by using 1 or more of the Internet services of the Internet service provider to do a restricted act without the consent of the copyright owner.

This isn’t an entirely original framing of ISP duties. The chances are that this language was taken from the United States’ very own DMCA, which in 512(i)(1)(A) states:

The limitations on liability established by this section shall apply to a service provider only if the service provider— (A) has adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers.

But New Zealand experience demonstrates the dangers of simply adopting language from other countries without including a wider context. “Repeat infringer” in the DMCA is a term that was not defined in the law itself, and remains contentious here in the United States. Legal experts like David Nimmer have argued that “repeat infringer” means what it says: someone who has been repeatedly shown in court to have infringed, not simply accused of multiple infringement by rightsholders. There’s certainly no universal acceptance in the home of the DMCA that rightsholders can force ISPs to throw US subscribers offline simply because they’ve been on the receiving end of (often inaccurate) notices by those same rightsholders.

The New Zealand law doesn’t clarify that element of “repeat infringers.”1 In their draft Code of Conduct, New Zealand’s ISPs have defensively accepted the widest possible interpretation, and conceded that they must take a “three strikes” response to rightsholder’s accusations, rather than actual court convictions.

The EFF points out that the law could inspire other countries to adopt similar legislation.

With the movement to legalize campus file-sharing with a blank tax, you’d think that the campus lawsuit campaign would be winding down. That appears to not be the case according to Pocono Record, a news site in Pennsylvania.

The report says school officials confirmed that 60 notices of copyright infringement have been received. More from the report:

“So far, the school has had to issue roughly 60 warnings to students this semester,” said Bob D’Aversa, head of ESU’s academic computing department. “We only had to issue about five during all of last year.”

“College campuses are easy targets,” D’Aversa said. “A huge amount of content gets downloaded through campus networks, and the RIAA can zero in on numerous offenders all in one place.”

Not wanting to shy away from any opportunity to insert some propaganda, the report also includes this:

“Society’s attitude toward downloading music illegally has become so lax that people forget that intellectual property is still property, and to acquire it without paying is stealing,” RIAA spokesperson Liz Kennedy said. “Institutions of higher education, of all places, are where people should learn about the value of intellectual property and the importance of protecting it.”

The lawsuit campaign over the years has earned the copyright industry few supporters. It was only recently that a Harvard professor weighed in on the situation describing the campaign with the following: ““Its’ a shake-down, it’s an extortion, it’s a blight and its an insult to the Federal Courts and the idea of law and to the poor people who have to work as the cogs of this administration making this machinery work”

With many campuses being targeted in the lawsuit campaign, mysteriously, Harvard was never a campus that appeared in any of the lawsuit campaigns. Many speculate that it’s merely because Harvard is a prestigious law school and that any lawsuit issued against a student there would be countered unlike many other campuses across the United States. Some suggest its a combination of available money and a large amount of knowledge of the law that has prevented the RIAA from targeting anyone at Harvard – essentially, the ability to fight back.

Still, it seems to be business as usual as the RIAA continues its lawsuit campaign against students.

Six years is an eternity and a half in internet terms. Even in business, six years is a long time to look back. Still, it doesn’t take much away from the significance of the RIAA being sued for the price fixing of their music albums.

History of the Case in a Nutshell

Back then, the RIAA was considered “The Big Five” Today, they are more like the “Big Four” with a possibility of being considered the “Big Three” if Sony and BMG ever become more than a joint venture or if EMI convinces regulators that selling the company to one of the remaining won’t harm competition in the market place (for some, a concept difficult to explain with a straight face)

The case put into question a system known as MAP or Minimum Advertised Pricing. The system was seemingly simple, the major record labels would subsidize record stores in exchange for keeping the prices of CDs above a certain amount. To keep things in perspective, Wikipedia defines Price Fixing as, “an agreement between business competitors to sell the same product or service at the same price. In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to profits for all the sellers.”

Ultimately, the RIAA settled the case for $67 million and also agreed to send $75 million worth of music albums to public groups and non-profit organizations. Universal Music Group, at the time, denied that they broke the law when using the MAP system for a period of seven years since the year 2000.

More Recent Price Fixing Allegations

The settlement in 2002 did not mean the end of the price fixing allegations. In December of 2006, allegations of price fixing cropped up in online music downloads during the UMG vs. Lindor case. The revelation was made public in 2007. While 99 cents is typically the standard price for an online music download, there was an admission that 70 cents was more likely a natural price for online music downloads. At the time, UMG insisted that the practice of online music store downloads is a trade secret and cannot be made public.

The suggestion of price fixing didn’t end in the courtrooms that year. Later in 2007, Trent Reznor of Nine Inch Nails was quite vocal about how “rediculous” the prices were for buying a music albums – saying that the record labels were “ripping people off” at the record store.

In one famous YouTube live video clip Trent said commented to a cheering audience that if the prices didn’t come down on his music album, “Steal it!”

Nine Inch Nails album “The Slip” currently on Amazon.com is currently at about $21.

A few other prices for music albums from Amazon.com:

Linkin Park – Meteora – $13

AC/DC – Back in Black – $8

Coldplay – A Rush of Blood to the Head – $12

The white Stripes – Icky Thump – $13

Metallica – …and Justice for All – $15

Kiss – Kiss – $11

It may be a far cry from the 20-40 per album a few years ago, so judging by Amazon prices, things have improved right now. It’s unclear right now if the prices today are the result of the economic turmoil or if they’ve been relatively stable for the last six months. Either way, it may be, in part, why there hasn’t been much in the way of major movement against the RIAA for any price fixing these days.

Damage Already Done?

For years, there has been a general sentiment of the RIAA charging insane prices for music amongst a number of customers. To this day, the argument of “the prices of albums are too high” has been a staple argument for many who don’t want to actually buy the albums anymore and turn to file-sharing instead. This is far from the only reason people bring up, but has been one reason both sides of the copyright debate have brought up from time to time.

These days, when it comes to a disasterous public relations record, there is no shortage of people who would quickly point to the RIAA for having the worst. So having a reputation of unfair prices may pretty well be par for the course who have been dealt with several other PR blows, like suing (effectively speaking) bloggers like Ray Beckerman, or Sony BMG’s rootkit scandal to name just two.

Still, one might wonder, what has become of the MAP program? Has it well and truly been perminently banned in favour of alternative business models, or will it make a stealthy return in the coming years? Who knows? At the moment, there doesn’t seem to be any movement to resurrect it, so it is very possible that the RIAA really did learn their lesson from the 2002 case.