Tuesday, May 5, 2009
The Blog of Legal Times notes that the Academy of Motion Pictures Arts and Sciences (AMPAS) has decided to sue 007 Productions, based in Goa, India, and holder of the domain name www.Oscars100.com, which it had offered to the Academy for $25 million. Passing up a golden opportunity to purchase the name for that price, the Academy filed in the Eastern District of Virginia. AMPAS has sued over domain names before to protect its brand, notably in 2001 and in 2007.
Monday, May 4, 2009
Ron Howard alleges that the Vatican has interfered with the filming of Angels & Demons, the sequel to The Da Vinci Code, which he is helming in Rome. Mr. Howard complains the Holy See has prevented the use of certain locations near churches that the director had selected. The Vatican denies the claim. Read more here.
Randal C. Picker, University of Chicago Law School, has published The Google Book Search Settlement: A New Orphan-Works Monopoly? as U of Chicago Law & Economics, Olin Working Paper No. 462. Here is the abstract.
This paper considers the proposed settlement agreement between Google and the Authors Guild relating to Google Book Search. Google boldly launched Google Book Search in pursuing its goal of organizing the world’s information. Even though Google was sensitive to copyright values, the service relied on mass copying and thus Google undertook a substantial legal risk in setting up the service. That risk was realized with the lawsuits by the Authors Guild and the Association of American Publishers. The October, 2008 settlement agreement for those suits will create an important new copyright collective and will legitimate broad-scale online access to United States books registered before early January, 2009.
The settlement agreement is exceeding complex but I have focused on three issues that raise antitrust and competition policy concerns. First, the agreement calls for Google to act as agent for rights holders in setting the price of online access to consumers. Google is tasked with developing a pricing algorithm that will maximize revenues for each of those works. Direct competition among rights holders would push prices towards some measure of costs and would not be designed to maximize revenues. As I think that that level of direct coordination of prices is unlikely to mimic what would result in competition, I have real doubts about whether the consumer access pricing provision would survive a challenge under Section 1 of the Sherman Act.
Second, and much more centrally to the settlement agreement, the opt out class action will make it possible for Google to include orphan works in its book search service. Orphan works are works as to which the rightsholder can’t be identified or found. That means that a firm like Google can’t contract with an orphan holder directly to include his or her work in the service and that would result in large numbers of missing works. The opt out mechanism - which shifts the default from copyright’s usual out to the class action’s in - brings these works into the settlement.
But the settlement agreement also creates market power through this mechanism. Absent the lawsuit and the settlement, active rights holders could contract directly with Google, but it is hard to get large-scale contracting to take place and there is, again, no way to contract with orphan holders. The opt out class action then is the vehicle for large-scale collective action by active rights holders. Active rights holders have little incentive to compete with themselves by granting multiple licenses of their works or of the orphan works. Plus under the terms of the settlement agreement, active rights holders benefit directly from the revenues attributable to orphan works used in GBS.
We can mitigate the market power that will otherwise arise through the settlement by expanding the number of rights licenses available under the settlement agreement. Qualified firms should have the power to embrace the going-forward provisions of the settlement agreement. We typically find it hard to control prices directly and instead look to foster competition to control prices. Non-profits are unlikely to match up well with the overall terms of the settlement agreement, which is a share-the-revenues deal. But we should take the additional step of unbundling the orphan works deal from the overall settlement agreement and create a separate license to use those works. All of that will undoubtedly add more complexity to what is already a large piece of work, and it may make sense to push out the new licenses to the future. That would mean ensuring now that the court retains jurisdiction to do that and/or giving the new Registry created in the settlement the power to do this sort of licensing.
Third, there is a risk that approval by the court of the settlement could cause antitrust immunities to attach to the arrangements created by the settlement agreement. As it is highly unlikely that the fairness hearing will undertake a meaningful antitrust analysis of those arrangements, if the district court approves the settlement, the court should include a clause - call this a no Noerr clause - in the order approving the settlement providing that no antitrust immunities attach from the court’s approval.
Download the paper from SSRN here.
According to the AP, the Supreme Court has told the 3d Circuit to "re-examine" its ruling in favor of CBS in the Janet Jackson case. The case is FCC v. CBS Corp., 08-653. The case follows on the high court's ruling in FCC v. Fox, decided last week. Here's more from John Eggerton, Broadcasting & Cable.
Update: Here's more from CNN.