September 8, 2012
Salmon Chase, Who?
Showing my utter ignorance of US legal history, I asked a colleague who the namesake of the NKU College of Law was when I first moved to the Buckeye State. "Oh yeah, that guy." Since then I've delved a bit into Salmon Chase's early law practice mostly by way of reading 19th century Cincinnati legal newspaper accounts.
Georgetown Law prof Randy Barnett has uploaded to SSRN his forthcoming Case Western Reserve Law Review article, From Antislavery Lawyer to Chief Justice: The Remarkable But Forgotten Career of Salmon P. Chase. Haven't read it yet but plan to. Here's the abstract:
Salmon P. Chase was as responsible as any single person for the abolition of chattel slavery in the United States. Yet his name is barely known and his career is largely forgotten. In this paper, the author seeks to revive his memory by tracing the arc of his career from antislavery lawyer, to antislavery politician, to Chief Justice of the United States. In addition to explaining why this is a career worth both remembering and honoring, the author offers some possible reasons why his remarkable achievements have largely been forgotten.
September 7, 2012
One Additional Thought On The Apple e-Book Case Settlement
I was rereading the opinion and this section caught my eye:
According to Kohn, the “e-books system” market, like the markets for many emerging technologies, is characterized by network externalities. This means to him that each additional user of a given e-books system confers benefits on existing users of that system. The more users of a system, the more each user can be assured that the system will continue to support a large number of programs or “apps” and a large variety of e-book titles. Markets characterized by network externalities tend to tip towards a single, dominant firm, resulting in monopoly. And once a monopolist establishes itself in such a market, such as Microsoft in the computer operating systems market and Apple in the digital music market, the result is inflated prices and retarded innovation.
Kohn further argues that because it is costly to switch from one e-books system to another, consumers expectations about the future of a given e-books system will tend to drive purchasing decisions. For example, the owner of a Kindle is unable simply to purchase e-books through the iBookstore if prices at the iBookstore are lower; to do so she must first purchase an iPad. Before investing in a given e-books system, then, consumers will try to anticipate the likely future success of the system vis-à-vis its competitors. This dynamic means that it may be difficult to displace a dominant firm in the ebooks system market once it establishes a monopoly.
None of this would be relevant if publishers adopted a device agnostic format for e-books. I doubt that Amazon or Apple would necessarily agree to this. Nonetheless, content is tied to these devices by the device manufacturers and not the technical limitations of producing that content. It is, at the very least, generic text. This may be a future market development.
One of the reasons physical media works so well is that standard devices by multiple manufacturers will read/play it. Say what you will about the viability of the CD as a music or data delivery system, but it doesn’t matter whether it’s played/read by Sony, on a computer, a boom box, or whatever. It works. Wrapping an e-book around Apple or Amazon DRM, related apps and the like is an artificial implementation of goods in the market. It doesn’t have to be that way. Imagine a physical book that can only be read using Google Glasses. That would be dumb. Must online always be proprietary?
The opinion is available as a link in my earlier post. [MG]
Why Not Corporation Day as a National Holiday?
Gerald Skoning is an old friend and retired corner office Seyfarth, Shaw partner who specialized in labor and employment law. This is not the first time he has plead the case for recognizing Corporation Day as an national holiday in an opinion piece.Here's a snip from his latest edition by way of the WSJ entitled We've Got Labor Day. Why Not Corporation Day?
The problem this Labor Day is that too many Americans aren't working. Rampant unemployment is the issue on everyone's mind.
It's an election year and the deafening mantra of "jobs, jobs, jobs" is blaring as the presidential campaigns head toward November. With job creation as the focus of this election, we should celebrate a new "Corporation Day" holiday honoring corporations, entrepreneurs and all other employers who create jobs.
Labor unions have had their day—for 130 years. It's high time we honored corporations with a national holiday. After all, unions aren't the engine of job creation in this country. Companies are.
Everyone could get into the act on Corporation Day. Those who don't feel celebrant could use the day to criticize obscene corporate profits and outlandish executive compensation. Others could attack the exploitation of workers here and abroad, or raise concerns about consumer protection and the environment. But many national holidays inevitably draw protesters—that's a treasured American tradition!
Friday Fun: Young Timmy Learns about Indexes and Secondary Sources
A great Maurer Law Library instructional video featuring Timmy as the archetypal 21st century law school student. [JH]
September 6, 2012
Judge Approves Settlement With 3 Publishers In Apple e-Book Case
Bloomberg is reporting that Judge Cote approved the settlement between the Justice Department and the three settling publishers accused of price fixing. I haven't seen the order yet. I'll update this post as soon as I see a copy.
The fact that the order is 45 pages of print suggests that it wasn’t something that Judge Cote or her clerks fashioned late last night after all the briefs were finally filed. She grants the motion to implement the Proposed Final Judgment, and in the process destroys all of the arguments raised by opponents. She even recognizes that 90% of the comments filed on the merits of the settlement were negative. They blamed Amazon:
Some comments were filled with extreme statements, blaming every evil to befall publishing on Amazon’s $9.99 price for newly released and bestselling e-books, and crediting every positive event -- including entry of new competitors in the market for e-readers -- on the advent of agency pricing.
The Court summarized the arguments against the settlement into four categories:
First, they expressed concern that the proposed Final Judgment would actively harm third-party industry stakeholders, such as brick-and-mortar bookstores, e-book retailers, independent publishing houses, and authors. Second, they argued that the decree itself is unworkable, goes too far in disallowing practices held to be legal under the antitrust laws, and involves DOJ in “regulation” of the e-books market. Third, they questioned whether the Government has established a sufficient factual basis for its conclusions regarding the competitive impact of the decree. Fourth, they alleged that defendants’ collusive behavior had substantial pro-competitive effects through, among other things, limiting the negative impact of Amazon’s monopoly; these comments contend that the decree is not in the public interest because it will facilitate retrenchment of Amazon’s monopoly practices.
The response to the first arguments is the antitrust laws protect the consumer and not the disruption to existing businesses by new distribution channels:
In this case, the “individuals alleging specific injury from the violations set forth in the complaint” are e-books consumers, not third-party stakeholders like brick-and-mortar bookstores. And although the birth of a new industry is always unsettling, there is a limited ability for anyone to foresee how the market will evolve. What is clear, however, is the need for industry players to play by the antitrust rules when confronted with new market forces. It is not the place of the Court to protect these bookstores and other stakeholders from the vicissitudes of a competitive market.
As to the second argument, the Court stated that some terms of the settlement, specifically the provision that allows the settling publishers to enter into agreements prohibiting the retailer from selling books at a cumulative loss were included at the behest of the publishers. It is voluntary for them to include these terms in their contracts with retailers. Other sections of the agreement, the Court states, address the issues raised in the complaint are neither overbroad or over-regulatory.
Some of the government allegations were attacked because the government did not conduct economic studies. This was argued in several of the briefs. The Court responded that these were not necessary. And as to the arguments that e-book prices fell after the implementation of agency agreements:
[R]egardless of what happened to average e-books prices, it is undisputed that the Agency Agreements disallowed retail price discounting. After defendants’ coordinated switch to agency pricing, a consumer could not find Publisher Defendants’ newly released and bestselling e-books for $9.99 at any retailer. Fourth and finally, the Government has further explained how the proposed Final Judgment will end price-fixing and prevent its recurrence by limiting the Settling Defendants’ ability to collude, share information, and use retail price restrictions and Price MFNs in contracts with e-books retailers. Overall, these detailed allegations and explanations provide ample factual foundation for the Government’s decisions regarding the proposed Final Judgment.
The Court summarizes the fourth argument against the settlement:
In short, the comments contend that competition in the e-books industry is alive and well, in no small part due to the defendants’ allegedly illegal cartel. Even if such a cartel existed, its main accomplishment was to allow industry participants to compete on a level playing field.
This is the Amazon was a monopoly until the publishers did something argument. Judge Cote addressed Bob Kohn’s argument that the market definition includes proprietary reading devices, which makes it difficult for consumers to switch stores. If Amazon gains a monopoly, then this difficulty helps Amazon keep it. The Court says all of this is speculative and that anti-competitive agreements alleged against the publishers foreclose all kinds of market innovations such as “all you can read” subscription services, book club pricing, and rewards programs. Moreover, even if Amazon gained a monopoly, the conduct of the parties is not justified as a reaction. Judge Cote notes:
The familiar mantra regarding “two wrongs” would seem to offer guidance in these circumstances.
The Court next addressed Apple’s arguments. The first is that the settlement requires the publishers to terminate their agency agreements within seven days. These contracts extend that right to thirty days for other retailers. Additionally, the Court may not impose obligations via a settlement on third parties. The Court stated that Apple is under no obligation to do anything under the settlement. The publishers are the only ones who are required to act. Apple more or less had notice of the settlement since April. Any impact on Apple compared to other retailers is minor.
Download the Apple Settlement Order. I guess it will be on to the Second Circuit. [MG]
A Call for Donations from EveryLibrary to Help Establish a PAC for Public LibrariesA grassroots movement, EveryLibrary, is soliciting donations to establish itself as a 501(c)4 dedicated to supporting local library ballot initiatives and voter education campaigns across the US. Donations are needed now for what is being called the nation's first library PAC. For background information, see Beverly Goldberg's ALA article entitled The Campaign Is On to Form the Nation’s First Library PAC. [JH]
"Hacking" New and Old Prohibitions: From the 18th Amendment to Today's Copyright Laws
About The New Prohibition: A Look at the Copyright Wars Through the Lens of Alcohol Prohibition by Temple Law prof Donald Harris [SSRN; University of Tennessee Law Review, Forthcoming) Techdirt's Mike Masnick writes "[w]hile that might be slight (or significant) hyperbole, law professor Donald Harris has put together a fantastic paper that compares the two situations and finds an awful lot of similarities." See So Many Similarities Between Copyright Law And Prohibition.
OK, well, there are always structural similarities that can be identified as elements of legally sanctioned prohibitions. Clearly the most important thesis offered by Harris, one shared by the similarity between copyright restrictions and the 18th Amendment, is that both could not (can not) be rigoriously enforced when a legal scheme was (is) inconsistent with widespread citizen interests and behavior.
Here's the abstract for The New Prohibition: A Look at the Copyright Wars Through the Lens of Alcohol Prohibition [SSRN]:
Over the past decade, copyright holders and content providers have increased legislative and judicial protection for copyrighted works and have concurrently increased enforcement efforts. Much of this has been directed at curbing massive filesharing. Despite the tremendous amount of resources expended in such efforts, filesharing continues at unabated and never before seen levels. Filesharing continues and enforcement efforts has failed because neither the laws nor the copyright industry’s efforts take into account the immense resistance and civil disobedience engendered by efforts to prevent a considerable segment of society from recognizing the reality of the Internet. Moreover, such enforcement efforts also fail to address the evolving nature of copyright. Rather than continuing to impose on society laws that society feels are both unjust and illegitimate, new copyright laws much reflect current societal morals and norms. These current norms suggest that filesharing is here to stay. As such, this Article offers a different look at the controversy surrounding the filesharing.
This Article argues that legislators, commentators, and the copyright industry must entertain laws that embrace filesharing, and seek other ways to incentivize artists and other creators. The Article traces Alcohol Prohibition of the 1920s and 1930s as an historical example of laws that were inconsistent with the vast majority of society’s morals and norms. Looking back, one can see many similarities between the Alcohol and Filesharing Prohibitions. The Article suggests, then, that lessons learned from the failed “noble experiment” of Alcohol Prohibition should be applied to the current filesharing controversy. Doing so, the Article advocates legalizing certain noncommercial filesharing. A scheme along these lines will comport with societal norms and will force new business models to replace outdated and ineffective business models.
Hat tip to PinHawk Blog. [JH]
September 5, 2012
Amicus Brief In Apple e-Book Case Filed As A Five Page Comic Strip
Attorney Bob Kohn filed his amicus brief in the Apple e-book pricing case. The Court limited his filing to 5 pages. His response was to file it in the form of a five page comic strip with three additional pages of citations. I’m not sure if the Court will or will not be amused. It is novel. There are the usual statements that Amazon is a predatory seller, that the goal of antitrust law is efficient pricing, not low prices, and that the e-book market’s competition is piracy. There is no mention of the tangible book as a market factor. It’s an easy read and is available as an embedded document at paidContent.
Aside from presenting its general argument, the brief is scripted in ways a normal brief could not express. Comics convey just as much context from the drawing as well as the dialogue, sometimes in a heavy-handed way. There are the opening panels showing a stern judge ordering the filing to be five pages. A young woman takes the role of the public chorus as Kohn explains his argument to her. The give and take in dialogue predictably focuses on Amazon’s conduct as a predatory marketer, concluding that Amazon is the bad guy in all of this. The Assistant AG arguing before the Court is portrayed as an angry blowhard pointing his fingers at the judge who has lines around her head as if startled. His dialogue bubble is all jagged in comparison to that of Kohn and his companion, and it suggests a narrow or rote reading of the law: “Low prices are one of the principle goals of antitrust law.” One can’t get away with that kind of stuff with mere text.
Speaking of which, Kohn should be grateful the Court did not order his response in the form of a tweet. What would that be? “Apple good, Amazon bad, DOJ wrong. Citations to follow.” [MG]
Sacramento Public Library Authority Reaches Settlement on Lending eReaders Inaccessible to Persons with Disabilities
Last week the DOJ announced it and the National Federation of the Blind have reached a settlement with the Sacramento Public Library Authority (CA) to resolve allegations that the library violated the ADA by using inaccessible eReaders, specifically Barnes & Noble's NOOK, in its patron lending program. From the DOJ press release:
Under the settlement agreement, the library will not acquire any additional e-readers for patron use that exclude persons who are blind or others with disabilities who need accessible features such as text-to-speech functions or the ability to access menus through audio or tactile options. The library has also agreed to acquire at least 18 e-readers that are accessible to persons with disabilities. The settlement agreement also requires the library to train its staff on the requirements of the ADA.
“Emerging technologies like e-readers are changing the way we interact with the world around us and we need to ensure that people with disabilities are not excluded from the programs where these devices are used,” said Assistant Attorney General Thomas E. Perez.
Hat tip to DigitalKoans. [JH]
September 4, 2012
Can An Individual Bequeath Digital Media?
Not too long ago Market Watch asked the musical question of what happens to digital files when the owner passes away. It’s a valid question in this day of consumptive devices where libraries of music, books, and other content reside in a marketer’s cloud. This isn’t much of an issue on a device with a few hundred or more songs, and books. But, as the article suggests, someone with 10,000 purchased songs and books has a serious chunk of change invested in media. Potential heirs may want some of that.
The answer is likely that the files are not transferrable, at least in a legal sense. It is possible to keep the account going I suppose if one’s password to the iTunes or other proprietary store is known to loved ones. That seems a bit impractical given that consuming devices are designed for obsolescence. There is a likely point where the combination of devices and accounts cannot be sustained. Backing up to physical media would be an option depending on the amount of DRM applied to a file. Music is less of a problem than e-books as there are any number of file formats for sale that lend themselves to archiving. Books, on the other hand, are so locked down that it would take essentially illegal means to pass the files down to others.
The article notes that one attorney is proposing a digital trust where passwords and other account information are stored for the benefit of loved ones. I have a feeling that content providers wouldn’t be sympathetic to transferring digital product from one generation to another. That would mean lost, uh, sales of limited licenses to access content under certain conditions. It’s an interesting question that the law has not addressed. There aren’t even papers on the topic in SSRN, at least not which directly examine the question.
Physical media may be on the wane in the age of the cloud. It has one advantage, however, in that it can be given away without recourse to the people who created the content. [MG]
Greg McCaffery Named CEO of Bloomberg Law
Quoting from today's press release:
As CEO, McCaffery will be responsible for development and execution of strategy and management of day-to-day operations as Bloomberg Law expands its role as a leader in the field of online legal research. He succeeds Larry Thompson, who is retiring.
Just in Time for Christmas eShopping: Walmart claims sales increase since roll-out of its own semantic search engine
D'oh! I never once gave a thought about where the SE technology for eCommerce sites came from. Nor had I ever thought about the possible competititve advances any such technology might give to an eCommerce retailer. That's because I never thought that the walmarts of the eCommerce world might be creating their our SEs in-house. Insert your favorite Homer Simpson quote here.
... Recently I read that Walmart's research and technology lab created and launched Polaris. Polaris is a semantic search engine based on the lab's Social Genome project which identifies entity relationships using public data on the Web, proprietary data, and social media. I have no idea if the Social Genome database establishes taxonomic relationships in hierarchical or cluster or hybrid models one might expect for a "semantic search engine" but Walmart is claiming a 10% to 15% increase in shoppers completing a purchase since Polaris was rolled out.
Sam Walton would be proud. Considering the scope of Walmart's catalog and pricing of items for sale, will searchers of the Company's eCommerce site turn to "best pricing" sites after finding the item they were looking for (and just as importantly related items) by way of Polaris? Is the increased sales stats based on single item purchases, bundled item purchases? Who knows. A purchase is a purchase is a purchase.
For more, see Ryan Kim's Walmart builds its own shopping search engine (Gigaom), John Ribeiro's Walmart rolls out semantic search engine, sees business boost (Computer World) and Jessica Leber's Walmart Dives Into Search Technology (Technology Review). See also Stephen Arnold's think piece on Beyond Search, WalMart Blasts Off with Polaris: Destination Semantic Search.
End note. The published reports indicate that Walmart Lab created Polaris in just 10 months. [JH]
Eviscerating Textual Originalism by Way of a Book Review: Posner on Scalia and Garner's Reading Law: The Interpretation of Legal TextsRead more about it: Judge Posner's The Incoherence of Antonin Scalia. [JH]
September 3, 2012
A History of Labor Day
From the History Channel. See also the DOL's The History of Labor Day. [JH]