Law Librarian Blog

FTC More Or Less Gives Google A Pass On Search, Mostly Cares About Patents

The FTC announced a proposed settlement with Google today over various antitrust allegations made over licensing of patent standards that are essential to the mobile phone hardware industry.  Google purchase Motorola earlier to acquire a substantial patent portfolio as legal capital in the patent cases surrounding its Android operating system.  Apple, Microsoft, Samsung, Oracle, and others have initiated lawsuits globally claiming patent violations over features in their various systems.  Some of it is motivated over money but more of seems to be designed to limit competition in various markets what with demands to exclude products from sale over violations. 

The FTC’s proposed consent decree would require Google to license its essential standards patent portfolio on fair and reasonable terms, which is how the industry would normally work.  The statement from the Commission, however, seems to put all companies on notice that the Commission is willing to step into the “patent wars” if competition is at stake: 

We previously explained in the Commission’s unanimous filings before the United States International Trade Commission in June 2012 that the threat of injunctive relief “in matters involving RAND-encumbered SEPs, where infringement is based on implementation of standardized technology, has the potential to cause substantial harm to U.S. competition, consumers and innovation.”  The threat of an injunction allows a SEP holder to demand and realize royalty payments reflecting the investments firms make to develop and implement the standard, rather than the economic value of the technology itself.    In addition to harming incentives for the development of standard-compliant products, the threat of an injunction can also lead to excessive royalties that may be passed along to consumers in the form of higher prices.  Alternatively, an injunction or exclusion order could ban the sale of important consumer products entirely.  This type of “patent ambush” harms competition and consumers and is rightly condemned by the Commission. 

We take this action pursuant to the Commission’s authority under Section 5 to prohibit unfair methods of competition, which both Congress and the Supreme Court have expressly deemed to extend beyond the Sherman Act.  A stand-alone Section 5 unfair methods of competition claim allows the Commission to protect consumers and the standard-setting process while minimizing the often burdensome combination of class actions and treble damages associated with private antitrust enforcement.  In a society that all of us recognize is overly litigious, the judicious use of Section 5 is a sensible and practical way for the Commission to bring problematic conduct to a halt.  [footnotes omitted.] 

I’m particularly interested in seeing how the Commission may investigate other claims of patent abuse by other companies in ways that it may harm competition.  If Google is litigious in this area, it is far from the only company to go that route. 

The two other areas where the Commission had investigated Google are how it treated advertisers conducting ad campaigns over multiple ad platforms and the claim of how it used content from other web sites in displaying search results.  Google’s contracts with advertisers made it difficult for advertisers to evaluate the effectiveness of its ads.  Google agreed to give advertisers more freedom in managing campaigns over multiple platforms without impacting their ranking in search results. 

Other companies have complained that Google appropriates their web content such as reviews and rankings as part of their own search results.  The Commission noted that this practice could conceivably “chill” a web site from creating product innovations.  Another claim was that Google favored its own properties when producing search results.  The FTC said this in the press release: 

According to the Commission statement, however, the FTC concluded that the introduction of Universal Search, as well as additional changes made to Google’s search algorithms – even those that may have had the effect of harming individual competitors – could be plausibly justified as innovations that improved Google’s product and the experience of its users. It therefore has chosen to close the investigation. 

I have not seen that language in the Commission statement, but I’ll take the press release at face value.  Closing the investigation with that conclusion should frost more than a few Google competitors.  Microsoft recently and bitterly complained that Google refuses to license code to allow Windows 8 phone users to watch YouTube videos via an app.  Google provided such an app for Android and iPhone users.  Windows 8 phone users are limited to YouTube access via a browser which is substandard compared to native apps.  This conceivably makes the Windows phone platform less desireable. 

Fairsearch.org, which is an industry consortium of Google competitors, would like to see Commission action to diminish Google’s search dominance.  They will be highly disappointed with this end to the investigation.  Not only was there a “nothing to see here response,” there wasn’t even a fine.  Beyond that, only the patent issues and conclusions are binding on Google.  [MG]

Penguin Settles e-Book Case

Penguin has settled e-book price fixing claims with the Department of Justice, leaving only Apple and Macmillan to defend the case.  From the DOJ press release:

Under the proposed settlement agreement, Penguin will terminate its agreements with Apple and other e-books retailers and will be prohibited for two years from entering into new agreements that constrain retailers’ ability to offer discounts or other promotions to consumers to encourage the sale of the Penguin’s e-books.  The proposed settlement agreement also will impose a strong antitrust compliance program on Penguin, which will include a requirement that it provide advance notification to the department of any e-book ventures it plans to undertake jointly with other publishers and that it regularly report to the department on any communications it has with other publishers.  Also for five years, Penguin will be forbidden from agreeing to any kind of most favored nation (MFN) agreement that could undermine the effectiveness of the settlement.

The department is currently reviewing the proposed joint venture announced by Penguin and Random House Inc., the largest U.S. book publisher.  Should the proposed joint venture proceed to consummation, the terms of Penguin’s settlement will apply to it.

That second paragraph is probably the motivating factor for Penguin entering into a settlement.  I can’t imagine the Department approving the merger while litigation is pending.  I don’t know if this will affect the defenses of Apple and Macmillan or particularly their resolve to continue.  It may get lonely in the courtroom by the time the trial begins.  [MG]

Working Class Heroes: Did Congress violate the Constitution’s Compensation Clause by not paying COLA increases to Federal Judges?

ABAJ News' Martha Neil has reported that a group of federal judges plans to seek class action status because they did not receive COLA raises in 1995, 1996, 1997, 1999, 2007 and 2010, even though other federal workers did.

Is it time for ... yes it is. [JH]

"Reality Shows" Head to Court and Not to Proceedings in Judge Judy's Court

The Courthouse News Service reports the talent agency that represented the stars of The History Channel's "Pawn Stars" claims in court that it lost millions of dollars when another agency interfered with its contract. See 'Pawn Stars' Ex-Agent Sues History Channel. In 'Storage Wars' Is a Fake, Fired Actor Says, Courthouse News reports that David Hester has sued the "Storage Wars" production company, Original Productions, and A&E Television Networks because he was fired after complaining to the show's producers that they were "salting" storage lockers once the lockers had been acquired by the "Storage Wars" stars. [JH]

Because One Can Never Get Enough Cat Videos (particularly when Interstate Commerce is involved in litigation)

As a quick video footnote to Mark Giangrande's Commercially Exhibiting Cats Affects Interstate Commerce post, here is a clip titled "The Cats at Key West's Ernest Hemingway Home & Museum."

Quoting the YouTube text:

Uploaded on Oct 1, 2008

In 1935, famed author Ernest Hemingway received a cat named "Snowball" while living and writing in Key West. With paws featuring six toes, "Snowball" was the first of a long line of felines that has helped make the Hemingway Home and Museum one of the most popular visitor attractions in the Florida Keys.

[JH]

Whatever Happened To The Rudovsky Case?

Anyone remember the Rudovsky case?  That’s the one where West was successfully sued by academics David Rudovsky and Leonard Sosnov for defamation when West put their names on a pocket part update that was of low quality.  That may be an understatement.  The case was notorious for exposing some of West’s editorial practices for a “continuously updated resource.”  See my posts The Rudovsky Case and Quality Control and A Bit More On The Rudovsky Case for the details.

The parties appealed the outcome to the Third Circuit Court of Appeals.  Not much happened until January 20^th of this year when a Stipulation of Dismissal Pursuant to F.R.A.P 42(B) was filed.  The parties accepted the Court’s Appellate Mediation Program and essentially settled.  The dismissal was with prejudice and without costs to each party.  As Paul Harvey would say, now you know the rest of the story.  [MG]

Sixth Circuit Strikes Down Constitutional Amendment On Race In Education

The Sixth Circuit Court of Appeals issued a controversial decision last Thursday which struck down a voter-enacted amendment to the Michigan Constitution that banned consideration of race in school admission, employment, and public contracting.  The challenge to the Amendment, known as Proposal 2, was strictly on the basis of education policies.  The Court explicitly did not address the impact of the amendment to the employment and public contracting components.

The Sixth Circuit’s opinion comes in the form on an en banc decision that polled the Court’s roster of Judges in an 8 to 7 split for striking down the Amendment.  The Court used the “political process” doctrine which basically holds that a law which burdens a minority from seeking favorable legislation—in this case favorable admission policies from university governing boards—is unconstitutional.  The Court used two Supreme Court cases, Washington v. Seattle Sch. Dist. No. 1, 458 U.S. 457, (1982) and Hunter v. Erickson, 393 U.S. 385, (1969) as the basis for its decision.  Those cases struck down referendum-based legislation as impermissibly burdening the political process for minorities.

The dissents skewered the majority for reasoning they believed turned the Equal Protection Clause on its head.  Even though race may be taken into limited consideration under Grutter v. Bollinger, 539 U.S. 306 (2003), doing so is permissive rather than mandated by the decision.  The dissents reason that under these circumstances the majority has moved considering racial preferences as beyond the political process.  They find Hunter and Seattle as an “extreme” application of the political process doctrine.

The decision may not matter in the long run as the Supreme Court is essentially considering the issue of how far race can be used in the admissions process in Fisher v. University of Texas at Austin.  The question presented in that case is:

Whether this Court's decisions interpreting the Equal Protection Clause of the Fourteenth Amendment, including Grutter v. Bollinger, 539 U.S. 306 (2003), permit the University of Texas at Austin's use of race in undergraduate admissions decisions.

The prediction of many commentators based on the oral argument transcript is that the Court will strike down the use of race in admissions.  The Court has been pretty divided on this issue since the Bakke decision in 1978.  One factor in the Fisher case is that Justice Kagan is not participating in the decision.  The Michigan Attorney General’s Office has said it will appeal the Sixth Circuit decision to the Supreme Court.

The case is Coal. to Defend Affirmative Action, et al. v. Regents of the Univ. of Mich., et al., (Nos. 08-1387/1389/1534; 09-1111).  [MG]

US Calls For Dismissal Of Bob Kohn's Appeal In Apple e-Book Case Settlement

The United States has filed its brief with the Second Circuit Court of Appeals opposing the appeal by attorney Bob Kohn in the Apple e-book settlement entered by Judge Cote last September.  Kohn had filed a motion to intervene in the case which Judge Cote denied.  The appeal ostensibly is on that denial, though Kohn indicated that he intended to use the appeal as a vehicle to attack the settlement on appeal.

The Justice Department argues that the appeal should be dismissed because there is no case or controversy before the Court.  Kohn, the Department argues, does not have standing because he is not a party to the settlement nor is he harmed by it.  My favorite line in the argument:

But paying lower, rather than higher, prices does not in itself constitute an injury; there is no legally protected interest in paying higher prices.

Other arguments include reversing the order entering the final judgment would not redress Kohn’s alleged harms.  His lists of points raised on appeal do not add to his standing before the Court.  For what it is worth, Apple filed a motion to revise the caption of the case.  It now shows Apple as “defendant-appellee.”  Apple states that it is not a party to the settlement and it is not appealing anything.  Apple’s brief also states that it takes no position on Kohn’s appeal, noting that the settling publishers also opposed his motion to intervene.  His response is due by December 14.

Brief of the United States:  Download United_States_of_America_v._Ap_23.

Brief of Apple: Download United_States_of_America_v._Ap_24.  [MG]

Google Asserts Fair Use To Defeat Class Action Status In Book Scanning Case

Google filed its brief on Friday contesting Judge Chin’s decision to certify the plaintiffs in the book scanning case as a class.  Judge Chin at the time of certification denied Google’s request to stay the action and set the case for trial.  The Second Circuit stayed proceedings in the case pending the outcome of the appeal.

Google essentially argues three points:  1) the class is divided over the benefits or harms to authors due to the scanning project; 2) Google is allowed to present the fair use defense and the application to the facts may vary with individual books; and 3) each class member’s right to recovery will vary depending on the proof of copyright and registration.  Google relies on the Wal-Mart v. Dukes class action case decided by the Supreme Court in the last term, the Georgia State e-reserve case, and the HathiTrust case among others for its positions.

Google questioned the Authors Guild’s representation to the class by citing its own expert survey that showed 58% of author responders approved Google scanning their works.  The Authors Guild has the burden of showing that its interests do not conflict with that of class members according to the filing.  So far, that showing has not been made.

Other case law allows Google to mount the fair use defense in this action.  Other cases, such as the Georgia State e-reserve case weighed fair use against the type of use made for individual volumes.  Some of this measured the amount of use and the purpose for which it was used.  I can imagine the Authors Guild arguing against this simply on the basis that Google is a for-profit entity where a public university is not.  Google nonetheless has the right to assert that defense, especially in light of the HathiTrust case (and other precedent) where the District Court found the electronic index created as a result of scanning to be transformative and fair use.

This leads to the third argument that the class is potentially unrepresentative due to the amount of proof necessary to show a given book or author is even part of the case.  Google offers that registration records would have to be produced on individual works and evidentiary hearings would be held to see if a book qualifies for a remedy under the case.  The fact that different authors may have different interests in their works falls against class certification.  I imagine the Authors Guild would argue against these points when its brief if filed.

A copy of the brief with additional commentary and comments is available here at paidContent.  [MG]

Terms Of Apple Settlement With Europe In e-Book Probe Reported

Apple and major e-book publishers are set to settle an antitrust investigation by the European Union that parallels the contentious litigation Apple and publishers face in the United States.  The allegations before the European Commission is essentially the same:  Apple’s “most favored nation” contracts with publishers combined with adoption of the agency model inflated e-book prices for consumers.  Amazon played a factor in Europe as much as in the United States as it wants to discount e-books to build market share.

Reports indicate the unannounced terms Europe is ready to accept include Apple dropping its MFN contracts for a period of five years and letting retailers set their own prices for two years.  A formal announcement is expected within a month.  I wrote about this last September in a post titles Apple And Publishers To Settle e-Book Case in Europe.  The Commission at that point had made an initial determination that Apple and publishers had likely breached European trade laws.  The more recent announcement offers some specific remedies the parties have agreed upon.  That post speculates that the motivation for settling may be in the fact that the e-book market is worth a lot less that in the United States.  On that basis, it may not be worth the fight.

Latest news about the development is in paidContent, the Huffington Post, and the Inquirer.  [MG]

Almost a Founding Member? But What the Heck, AALL Has Joined the Owners' Rights Initiative

In the recent flurry of AALL web communities postings on this matter, one time-stamped October 29, 2012 at 11:20 AM in the Members Open Forum announced that "[l]ast week the AALL Executive Committee approved a request from the Copyright Committee for AALL to join the Owners' Rights Initiative." Based on earlier web community messages, my hunch is the decision was made late last week as in the afternoon of Oct. 25 or on Oct. 26. Along with founding members ALA and ARL when ORI was officially launched on Oct. 23, 2012, AALL is now listed as an ORI member. [JH]

Duncan School of Law Switches Tactics for ABA Accreditation

In Duncan School of Law Drops Lawsuit Against ABA Over Accreditation Denial (ABAJ News), Mark Hansen reports that Duncan School of Law has (1) dropped ts federal antitrust suit against the ABA over the denial of its bid for provisional accreditation and (2) withdrawn its appeal of a decision before an ABA appeals panel affirming the denial of its application. Instead  the school has filed a application for provisional accreditation with the ABA.

What can one say? Better luck next time... . {JH}

The Kirtsaeng Oral Argument

One of the very interesting things about the oral arguments before the Supreme Court yesterday in the Kirtsaeng case is that there was very little discussion of the facts in this case.  See Joe Hodnicki’s post AALL's Interest in the Owners' Rights Initiative and Today's SCOTUS Oral Arguments in Kirtsaeng and links therein for background on the issues in this case.  Most of it focused on the consequences of a ruling one way or the other on the viability of the First Sale doctrine as applied to foreign made goods.  The problem for the Court is that both sides are essentially asking for an all or nothing ruling.  Either the §109(a) consumer First Sale rights trump the rights of a foreign copyright holder to limit importation of copyrighted goods under §602(a)(1) or they don’t. 

Kirtsaeng’s counsel argued essentially that the words “lawfully made under this title” in §109(a) applies to works made in a foreign jurisdiction if they satisfy American copyright law.  Wiley’s counsel, former Solicitor General Ted Olsen argued that §602(a)(1)’s limitations on imports applies to goods manufactured under the laws of another country, thus the language of §109(a) does not come into play in these situations. 

Several of the Justices seized on this position and posited what happens when a library buys a foreign book, a museum buys a foreign painting, or when a Toyota contains copyrighted elements.  Can these be sold downstream?  Mr. Olson suggested other parts of the copyright cover those situations, such as application of the fair use defense.  The Justices weren’t buying it:

JUSTICE BREYER: Now, explain to me, because they're horribles if I summarize them, millions and millions of dollars' worth of items with copyrighted indications of some kind in them that we import every year; libraries with three hundred million books bought from foreign publishers that they might sell, resale, or use; museums that buy Picassos that now, under our last case, receive American protection as soon as that Picasso comes to the United States, and they can't display it without getting permission from the five heirs who are disputing ownership of the Picasso copyrights.

Those are some of the horribles that they sketch. And if I am looking for the bear in the mouse hole, I look at those horribles, and there I see that bear.   So I'm asking you to spend some time telling me why I'm wrong.

MR. OLSON: Well, I'm -- first of all, I would say that when we talk about all the horribles that might apply in cases other than this -- museums, used Toyotas, books and luggage, and that sort of thing -­ we're not talking about this case. And what we are talking about is the language used by the statute that does apply to this case. And that -­

JUSTICE BREYER: But we need -­

JUSTICE SOTOMAYOR: Don't those horribles -­

JUSTICE BREYER: -- interpretation -­

JUSTICE KENNEDY: But you have to look at those hypotheticals in order to decide this case.

 MR. OLSON: Well, and that's -­

JUSTICE KENNEDY: You're aware of the fact that if we write an opinion with the -- with the rule that you propose, that we should, as a matter of common sense, ask about the consequences of that rule. And that's what we are asking.

Olson finally said:

MR. OLSON: But the problem is -- the statutes may not be perfect with respect to this, and there may be horribles that occur under one set of interpretations of the statute, and the other interpretation of the statute is to interpret it as -­ as the petitioner -­

The Court does not seem to want to adopt an absolute rule if it can avoid it.  I’m not sure if it can craft something that comes between the two positions.  Kirtsaeng was not a sympathetic character in the case, but the alternative consequences by holding against him seemed worse.

The Government filed a brief in support of Wiley and argued that the Bobbs-Merrill case applies.  In this argument a distributor has the ability to segment markets but doesn’t control all downstream sales.  The Court was skeptical and noted that the statute codified the Bobbs-Merrill decision.  The Government ultimately stated that the consequences would be worse if the Court adopted Wiley’s interpretation:

JUSTICE ALITO: Which of the following is worse: All of the horribles that the Petitioner outlines to the extent they are realistic, or the frustration of market segmentation, to the extent that would occur, if Petitioner's position were accepted?

MR. STEWART: Well, if they actually happened, then I think the -- the horribles would be worse. But, as I say, we -- we feel that we have offered a reading of all the statutory provisions together that would avoid both.

The other couple of things I would say as to why a first sale by itself -­

JUSTICE ALITO: If the -- if that middle ground is -- were found to be not viable, which of the two sets of consequences is worse from the government's perspective, or can you not say?

MR. STEWART: I would say that the consequence that all foreign-made goods, even if imported into the United States with the authorization of the U.S. copyright owner, are subject to continuing licensing requirements, etc., I would say that would be worse than the frustration of market segmentation that would occur under Petitioner's view.

The American Association of Law Libraries is a member of the Owners’ Rights Initiative.  The organization issued a statement after the argument:

The Owners’ Rights Initiative hopes that the Supreme Court will take this opportunity to defend owners’ rights and clarify that if you buy something, you own it. We believe when you purchase something you should have the right to sell it, lend it, or donate it, regardless of whether that good was made in the US or elsewhere. If the Court rules in favor of Wiley, libraries may be unable to lend books, individuals could be restricted from donating items to charities, and businesses and consumers could be prevented from selling a variety of products, from electronics, to books, to jewelry, to used cars.  ORI looks forward to the Court’s decision in 2013 and regardless of the outcome, we will continue to be a champion for owners’ rights in America.

A very similar issue was decided squarely in favor of §109(a) in Quality King Distributors Inc., v. L'anza Research International Inc., 523 U.S. 135 (1998) in a 9-0 decision.  That played a part in the argument though the facts in the case did not completely align.  The Justices split 4-4 in the Costco case, keeping the 9^th Circuit opinion holding for import rights in place for the time being.  It’s going to be a hard case.  [MG]

AALL's Interest in the Owners' Rights Initiative and Today's SCOTUS Oral Arguments in Kirtsaeng

It took about an hour for AALL to respond to an Oct. 25th walled garden Members Open Forum message time-stamped October 25, 2012 11:41 AM not submitted by me but calling attention to an LLB post:

Please take time to read  the post on the Law Librarian Blog today, "You bought it, you own it..." by Joe Hodnicki. http://tinyurl.com/9oad2cf

Joe discusses the new coalition Owner's Rights Initiative and the case of Kirtsaeng vs. Wiley & Sons, Inc. to be heard by the Supreme Court on October 29, 2012.

Both the American Library Association and the Association of Research Libraries have joined this initiative. See ORI web site:http://tinyurl.com/bm3oky4 for a more complete explanation.

As librarians we are all potentially affected by the first sale doctrine. This could have enormous impact on libraries. I would like to see AALL make a statement on this topic.

The response on this matter in AALL's closed garden of web communitues was time-stamped October 25, 2012 12:50 PM and read:

The Copyright Committee was in the midst of our monthly meeting. Emily Feltren and Elizabeth Holland of the Government Relations Office, and Lucy Curci-Gonzalez (our Board Liaison) joined us for the call. As it happens, George Pike (former Copyright Committee Chair) and Amy Ash (current Committee member) co-authored an Issue Brief on Kirtsaeng, which will be posted very shortly. We were also discussing the Owners' Rights Initiative (ORI) and whether there is a role for AALL. We have submitted an inquiry with ORI Executive Director Andrew Shore to learn more about the new initiative and what options are available for participation, membership, etc. We hope to know more soon and will keep the communication flowing on this issue, including any Copyright Committee recommendations, through Lucy to the Executive Board.

(Emphasis added.)

Ah OK. An Issue Brief date-stamped Oct. [ ?] 2012, has been posted. See also the Amici Curiae Brief. As of yesterday morning, no additional AALL-sourced information for the membership had been posted that I spotted.

Remember oral arguments in Kirtsaeng will be presented today. Watch Kirtsaeng vs. Wiley & Sons, Inc (SCOTUSblog) for details because SCOTUSblog pays attention to what the hell is happening and provides documentation, commentary and analysis in near-real time. For starters, see Ronald Mann's Argument preview: Court tries again on copyright importation problem (SCOTUSblog, Oct. 18, 2012).

On LLB, see Mark Giangrande's Supreme Court To Hear Case On Applying The First Sale Doctrine To Foreign Goods, (Oct. 15, 2012) and The Deeper Implications Of The Pending Kirtsaeng Case (Oct. 24, 2012) which reported on a Oct. 23, 2012 ORI conference call. So there is plenty of information available to read "more about it."

Is there a role for AALL in ORI? More important is the web community statement that AALL wants to learn more about the Owners' Rights Initiative (ORI) and "whether there is a role for AALL." The first order of business is money. If AALL wants to join ORI like ALA and ARL already have as founding members, note well that members are providing the funding for ORI. How much? Don't know but where might the AALL cash come from if our professional organization wants to join ORI?

1. Using AALL President's budgeted discretionary allowance and/or;
2. Killing print versions of LLJ and Spectrum to save money and join 21st century publishing; and/or
3. Stop paying employed law librarians like the Vendor Liaison position and AALL LLJ  and Spectrum editors to perform work that should be uncompensated contributions for the good of the profession. If no one is willing to take on these good-for-the-profession tasks without becoming AALL hired help, then the tasks should cease.

Update on AALL. See LLB's October 31, 2012 post, Almost a Founding Member? But What the Heck, AALL Has Joined the Owners' Rights Initiative. [JH]

Iowa Law Hiring Case Concludes Unhappily

One of the cases making the news is one where plaintiff Theresa Wagner sued the University of Iowa law school because she was passed over for a faculty position.  She alleged she failed to get the job because of her conservative views and activities.  Of the 50 faculty members at Iowa, 46 are registered Democrats with only 1 registered Republican.  The School claims she fluffed the interview.

The jury returned a mixed verdict, finding against her on the claim that her First Amendment rights were violated, and deadlocked on her claim that she was denied her 14^th Amendment Equal Protection rights.  Her lawyers are upset that they did not get a chance to poll the jury after the verdict was announced.  More on the outcome of this case is in the Chronicle of Higher Education.  The report indicates that this case was on the messy side in its procedure.  It should be interesting to see how the Court of Appeals treats it.  [MG] 

A "Crock of Crap": Did Thomas Jefferson School of Law intentionally inflate its placement stats?

"In a sworn statement, Karen Grant, a former career services assistant director at Thomas Jefferson School of Law, admits that she fabricated graduate employment outcomes for the class of 2006. Grant alleges that her fraud was part of a deliberate scheme by the law school’s administration to inflate its employment statistics. She also claims that her direct supervisor, Laura Weseley, former Director of Career Services, instructed her on multiple occasions to improperly record graduate employment outcomes and justified the scheme because 'everybody does it' thus 'it is no big deal.' TJSL could face sanctions from the American Bar Association as severe as losing accreditation." Quoting from LST's Ex-CSO assistant director from Thomas Jefferson admits to fraud, alleges deliberate scheme by law school.

In an un-sworn statement, Thomas Jefferson School of Law dean Rudy Hasl called the allegations a "crock of crap." See Mark Hansen's Former Law School Employee Says in Sworn Statement She Was Pressured to Inflate Graduates’ Job Stats (ABAJ News). [JH]

The Deeper Implications Of The Pending Kirtsaeng Case

There was a very stimulating discussion yesterday via conference call on the Kirtsaeng case which will be argued in the U.S. Supreme Court next Monday.  I wrote about the case last week, mostly in the context of the law of the case and a potential effect on libraries.  The central issue in the case concerns the application of the first sale doctrine to foreign made goods.  I won’t repeat the specific facts at issue here.  They are in the earlier post.

The panel consisted of the following individuals:

• Marvin Ammori, Bernard L. Schwartz Fellow, New America Foundation and Affiliate Scholar, Stanford Law School Center for Internet & Society
• Hillary Brill, Global Policy Counsel for eBay Inc.
• Mark J. Griffin, General Counsel for Overstock.com, Inc.
• Joseph Marion, President of the Association of Service and Computer Dealers International (ASCDI)
• Alfred Paliani, President of the American Free Trade Association and General Counsel of Quality King Distributors, Inc.
• Vailey Oehlke, Director of Libraries for Multnomah County, Oregon
• Betsy Wilson, Dean of Libraries at the University of Washington
• Moderator:  Andrew Shore, Executive Director of the Owners’ Rights Initiative

The discussion brought out some of the implications of a decision upholding the Second Circuit’s ruling that the first sale doctrine does not apply to imported goods.  The context in this case is the resale of imported books but the impact could be much broader in a world with increasingly globalized trade.  One of the examples the panel used is technology.  Our electronic devices are typically manufactured outside of the United States.  If not the devices themselves, the parts they contain likely contain foreign-manufactured parts.  Technology built in cars is a perfect example.

It may seem absurd to suggest that one couldn’t resell a car because the radio it contains was manufactured at an Asian facility and the manufacturer refused permission for the resale.  I agree it would be absurd.  However, a ruling that limits first sale doctrine application would create another level of rights that can be negotiated.  This would likely result in higher prices for producers of finished goods and ultimately consumers. 

One of the suggestions at yesterday’s panel was that domestic manufacturers who might want to limit their products in secondary markets could easily manufacture their goods overseas as limit on distribution.  If this also sounds absurd, consider that Universal Music Group sued an individual for reselling promotional CDs on eBay.  The Ninth Circuit ultimately ruled that the “license” terms limiting resale ran afoul of the first sale doctrine.  The case (UMG v. Augusto, 628 F.3d 1175 (2011)) could have a different outcome under an affirmed Kirtsaeng.  All UMG would have to do is make their promotional CDs outside of the United States and make that make that notice of geography prominent.

The same thought could occur to any publisher who would rather sell new copies of books, music, and movies by limiting resale.  Consumers would not be the target of suits as such (though Troy Augusto was a targeted consumer in the UMG case).  Legitimate resale businesses, however, used book and music stores, could easily be targets to enforce a copyright regime.  As a consumer I’m just as happy to buy a used DVD copy of a Doctor Who episode at Reckless Records in Chicago for a very reasonable $6.99.  I’m sure Warner Bros. and the BBC would prefer I pay a much higher new price for the privilege.  Consumers will suffer if the law will allow cutting out these resale opportunities either by limiting the channel for used goods or by mandating higher prices for the privilege of buying something used.

Libraries in the United States lend books.  Betsy Wilson, Dean of Libraries at the University of Washington estimated that slightly more than half of the books in the system’s collection were imported.  It would be a nightmare to mine collection information to determine which books can be loaned and which could not.  Those supporting the lower court ruling in Kertsaeng say this is nothing more than drama on the part of libraries.  Really?  Have any publishers stepped up in writing that they wouldn’t enforce their importation rights if Kirtsaeng is affirmed?  I only ask this possibly dumb question because there is a track record in place for publishers on the distribution of e-books.  Libraries can only get them with ridiculous DRM and/or contract terms that severely limit their use.  Can we ever say that will not happen with print copies if the law allows it?

I understand what a “parade of horribles” is in the context of a legal argument.  Kirtsaeng won’t unleash the worst possible results if the Court affirms the Second Circuit, at least not immediately.  However, all bets will be off once business considerations start interacting with the decision.  And as several panelists noted, the Court’s decision won’t be the final word.  Congress will be treated to an expensive expansive round of lobbying from both sides to preserve or overturn the decision.  That effort will probably spill over into fair use if the HathiTrust and Georgia State reserve cases stand.  Kirtsaeng is about much more than whether an enterprising student can import textbooks for resale against Wiley’s wishes.    

More information on the coalition to overturn the Second Circuit is available at the Owners Rights Initiative.  [MG]

ARL Hosting Webcast on HathiTrust Decision This Afternoon

From the press release:

The Association of Research Libraries (ARL) will host a webcast on Wednesday, October 24, 2012, from 2:00 to 3:00 p.m. eastern time, to discuss the Authors Guild v. HathiTrust decision and the implications of this victory for research libraries. The webcast will be moderated by Brandon Butler, Director of Public Policy Initiatives at ARL, and will feature discussion from:

• Jonathan Band, of policybandwidth, an expert in copyright law and the co-author of the Library Copyright Alliance amicus brief in the HathiTrust case
• Peter Jaszi, Professor of Law at American University’s Washington College of Law, as well as co-facilitator of the Code of Best Practices in Fair Use for Academic and Research Libraries and a member of the legal team that represented the National Federation of the Blind
• Dan Goldstein, a partner at Brown, Goldstein & Levy, acts as counsel for the National Federation of the Blind (NFB) and has initiated a national legal campaign to ensure access to technology
• Jason M. Schultz, Assistant Clinical Professor of Law and Director of the Samuelson Law, Technology & Public Policy Clinic at the University of California Berkeley School of Law

To register for the webcast, please visit http://www.visualwebcaster.com/event.asp?id=90208.

An archive of the webcast will be made available on ARL's YouTube channel after the event.

For background, see Mark Giangrande's Authors Guild Loses Its Suit Against HathiTrust and Authors Guild Responds To Loss In HathiTrust Case. [JH]

Authors Guild Responds To Loss In HathiTrust Case

The Authors Guild isn’t getting the love it would like from the courts these days.  It opposed the settlement between three publishers and the Justice Department in the e-book price fixing case.  The Association of American Publishers settled with Google, effectively leaving the Guild to continue the fight on its own.  Then there was the loss in the HathiTrust case which looks as if it could affect the Guild’s legal position that scanning an entire work is not fair use.  Judge Baer ruled that despite the volume of books used, the online word index created out of the scans was transformative and fell under fair use.  Other than arguing that displaying snippets is out of bounds, Judge Baer’s opinion may give Judge Chin some cover in ruling on the issue. 

I wrote about the Guild’s loss in the HathiTrust case last week.  The Guild’s response came on Friday.  Curiously, there wasn’t much in the statement about fair use other than a generic sentence noting the Guild’s disagreement with every aspect of the ruling.  The bulk of the statement attacks the ruling in the Orphan Works Project where the University of Michigan had planned to make available in-copyright books where the rights holder could not be located.  The University did an admittedly bad job at identifying an orphan work and stopped the program until the standards for identification could be reevaluated.  Judge Baer ruled that since the program is not going forward there was not controversy to address.  The Guild’s reaction: 

“The so-called orphan works program was quickly shown to be a haphazard mess, prompting Michigan to suspend it,” said Paul Aiken, the Guild’s executive director. “But the temptation to find reasons to release these digitized books clearly remains strong, and the university has consistently pledged to reinstate the orphan works program. The court’s decision leaves authors around the world at risk of having their literary works distributed without legal authority or oversight.” 

We’ll be discussing the decision with our colleagues and co-plaintiffs in Europe, Canada, and Australia and expect to announce our next steps shortly. 

I would expect Michigan to come up with tighter standards if they plan to offer the program again.  I wonder, though, if the Guild will be allowed to represent “persons or persons unknown” if the issue goes to litigation for a second time.  I expect the Guild to appeal the most recent decision.  I’ll be interested in their arguments on fair use.  I think that is the more interesting aspect of the litigation.  [MG]

A Constitutional Challenge to Virginia's State FOIA as It Applies to Non-Residents

On Oct. 5, 2012, the Supreme Court granted cert in McBurney v. Young, 12-17 [SCOTUSblog case page] a case involving a state's power to grant access to its public records to its own citizens but deny access to non-residents under the rarely interpreted Privileges and Immunities Clause and the dormant Commerce Clause. For background, see Courthouse News reports Out-of-Staters Take Info Access Dispute to D.C. and Out-of-Staters Have No Claim to Virginia Files (Covers 4th Circuit ruling at 667 F.3d 454). [JH]