Technology law update 6 October 2010

Virtualised software licensing

Licensing virtualised software isn’t getting any easier:

Big picture: Software licensing for virtual desktops is incredibly complex, confusing and, in some cases, prohibitively expensive. “It’s like the tax code,” says Dave Buchholz, principal engineer at Intel’s IT unit

Like the tax code – ouch. This is not new, yet from a contractual point of view, licensing virtual software is relatively straight-forward. The complexity is not an inherent licensing problem, but simply a commercial consequence – partly due to the well-worn idea that complexity is good for business (think mobile phone plans), and partly due to vendors trying to have their cake and eat it too.

Besides piracy, studies show that even users who actively try to be fully compliant often cannot understand the licensing rules (and as the article says, even vendors can struggle to understand their own licensing). The reality is that in most cases, if there is money on the table that a licensing tweak could recover, those tweaks would have already been made. But while the practice of overly-complex licensing has perhaps lasted longer than expected, disruptive technologies such as usage-based cloud computing, and open source software and the increasing use of virtualisation itself, mean the trend will be toward simplified licensing and subscription models.

Name suppression laws to be tightened

The Government has announced changes to name suppression laws, following a number of high profile incidents, a prosecution, and a Law Commission report into the matter. Among the announced changes:

Introducing a new offence to capture New Zealand-based Internet service providers or content hosts who do not remove locally hosted suppressed information which they know is in breach of a suppression order, and who fail to block access or remove it as soon as reasonably practicable. [emphasis added]

This is an improvement on the Law Commission’s recommendation that ISPs and hosts “carrying” suppressed information should “block access” to it, which would have caused practical problems for ISPs (see my comments here). Having a requirement simply to remove locally hosted content is a simpler and more realistic approach. But it still remains an iffy matter – IT lawyer Rick Shera raises some pertinent questions here.

Coincidentally, on the same day as the Government’s announcement, a name suppression order forced a number of bloggers to remove posts that had previously the identity of certain individuals. By which time the information was already available in caches, syndicated posts, Twitter, etc – just another reminder of the difficulty of name suppression in the present day.

Who’s suing who(m)?

Another day, another US patent infringement claim. There are so many flying around, its hard to keep up. Fortunately the Guardian gives us this diagram. Expect to see a few more arrows added in the near future.

If you can’t beat ‘em?

Minorly ironical: Ars Technica reports on antipiracy lawyers apparently pirating the legal forms of other antipiracy lawyers.

Tech law update 2 June 2010

Legislation website upgrade

The excellent New Zealand Legislation website is to be upgraded over the next few years to improve search functions, among others. A welcome addition will be more historic legislation being made available online.

Aussie internet filter to go ahead

The Australian government is pushing on with its daft mandatory internet filter. New Zealand is currently trialling a similar scheme, but no plans have been announced to make it compulsory. Certainly, while IT-savvy Steven Joyce is ICT Minister this is unlikely to change. The good news is that we will have the benefit of watching how the Australian scheme goes before launching our own (which would have been a great approach for the ETS too…)

Software audits

A local report mentions “rumours” that Microsoft is taking a more aggressive stance on licence compliance audits. While some people typically react with alarm over such suggestions, basic auditing is quite reasonable, and Microsoft is within its rights to do so. It is important for commercial software firms whose revenue base can be substantially undermined otherwise. In my experience, Microsoft is very reasonable about how it approaches these things (a certain “licensing adviser / salesperson” I once dealt with was a different matter, although she was independent of Microsoft).

Turn left at “common sense”

In the US (of course) a woman is suing Google after she followed its maps into traffic:

When Google Maps’ walking directions instructed Lauren Rosenberg to walk along a very busy highway with no pedestrian walkway, she followed the directions exactly. Unfortunately, she was hit by a car in the process.

I wonder if she applies the same unquestioning adherence to her car navigation system?

Tech law update 19 May 2010

Trade Me piracy prosecution

The NZ Herald reports:

An Auckland student has incurred the wrath of computer giant Microsoft after selling unlicensed versions of its products through online auctioneers Trade Me. Shaahil Ali of Papatoetoe was ordered by the Manukau District Court to pay the US-based multinational $22,176 [plus costs] after he admitted copying its programs, then selling them on.

Ali sold 21 pirated copies of Microsoft Office 2007, netting $6,400. That works out at about $304 per copy – $105 more than buying the Home version from Dick Smith (though he may have been selling a Pro version). The fact that an unsophisticated operation such as Ali’s was able to net several thousand dollars for essentially no outlay highlights the challenge of fighting piracy. It also provides a reminder that not all piracy is simply about losses to rights-holders, but also unjust / illegal enrichment of the infringers.

That said, New Zealand is not too bad in the piracy stakes. A new study by the Business Software Alliance shows New Zealand has the 4th lowest rate of software piracy world-wide. However, the Dominion Post reports that this low piracy rate has not been “rewarded” with lower prices for consumers.

More pay for play

Aussie gyms have been hit with a 1500% rise in music royalty charges, following a decision of the Australian Copyright Tribunal enabling the hike. This could have implications in New Zealand, with a fees revamp expected later this year. Which would seem likely, as the New Zealand organisation administering licensing fees – Phonographic Performances New Zealand – shares many of the same members as its Australian counterpart.

Privacy in a nutshell

Wellington barrister Stephen Price has won the Sir Geoffrey Palmer chocolate fish prize for best definition of “privacy”:

Privacy is what people believe they have lost when they complain about their privacy being infringed.

A good example of which is provided here:

A magazine did not intrude into a young woman’s privacy when it published photos that she had uploaded to social networking site Bebo when she was 15 because the images had already been widely circulated online… “The magazine had not taken the material from the complainant’s Bebo site; rather it had published a piece commenting on something that had widespread circulation online (having been taken from the Bebo page sometime ago by others) and was easily accessed by Google searches,” said the PCC’s ruling.

Tech law update 17 May 2010

P2P operator personally liable for copyright infringement

A US court has ruled that LimeWire, one of the early popular file-sharing sites, induced copyright infringement (Eric Goldman has an excellent summary here of the “intention” issue). While this outcome was really inevitable, what is more relevant is that the Judge also ruled that the founder and sole director, Mark Gorton, is personally liable. This is a clear warning that peer-to-peer operators potentially face personal liability – which some say could have a chilling effect of P2P services.

In New Zealand, section 92B of the Copyright Act provides a limited safe harbour from copyright infringement (see my Computerworld article here) [Note: this part of the Copyright Act is due to be amended] . Whether this would protect a LimeWire-like operation in New Zealand is debatable – s92B does not protect intended infringement.

The US decision also involved liability under trade practices laws. In New Zealand, personal liability can attach to directors of companies under the Fair Trading Act 1986.

50,000 Hurt Locker downloaders to be sued

It is being reported that upwards of 50,000 people are in the process of being sued for pirating the Hurt Locker movie. The movie was leaked to the internet several months before its release, which potentially cost it dearly in ticket revenue. The lawsuits are aimed at generating settlements. Since the first lawsuits were filed in January 2010, about 40% have already settled.

There are no reports of proceedings outside of the US. Class actions in New Zealand are not facilitated by the legal system, and are very difficult to bring (a failing of our legal system) and it is therefore unlikely that proceedings will be brought against New Zealand users due to the high cost of doing so.

iiNet appeal set down

The legal appeal of iiNet’s total victory over anti-piracy group AFACT ‘s claims of copyright infringement liability in Australia has been set down for August this year. As with the first ruling, this appeal will be closely watched – enormous resources are being put into heavyweight IP litigation around the world to determine just where the line should lie for ISP / third-party liability for copyright infringement. Several decisions have recently gone against rights-holders, while others (such as the Newzbins case in the UK and the LimeWire case above) went the other way. The iiNet appeal will be heard in the Federal Court. If iiNet wins again, it is likely that AFACT will seek a further appeal to the High Court of Australia.