September 28, 2007
$5 Billion Suit Against Google Dismissed
A postscript to our friend, Dylan Stephen Jayne, who sued Google for $5 billion. The District Court in Pennsylvania allowed him to proceed in forma pauperis and then dismissed the case sua sponte. The Court found that Jayne's assertion that his social security number when turned upside down spells out the word Google in code fails to violate a law. The dismissal included a statement prohibiting the complaint from being amended. Dylan, your 15 minutes are up.
The order is here.
September 27, 2007
Vonage is Hit by Two Patent Decisions Against It
Vonage suffered a stinging defeat in the Circuit Court of Appeals for the Federal Circuit on September 26th. Vonage appealed a decision against it when Verizon sued the company for infringement of three patents it claimed Vonage used in implementing its Internet telephony service. The trial court held the Vonage did violate the three patents. It awarded damages of $58 million and a 5.5% royalty on future infringing sales, and an injunction on future use of the patented technology. The appeals court upheld the findings on two of the three patents and vacated the damages pending further proceedings in the trial court to recalculate damages. News reports indicate that the overturned claim is the least of the claims against Vonage and suggest that the recalculated damages could be just as large.
The day before, Sprint/Nextel won another patent case against Vonage involving six patents belonging to Sprint. That resulted in a $69.5 million damage award. Vonage expects to appeal this decision.
Senate Holds Hearing on Google-DoubleClick Merger
There's a nice report in the Washington Post on the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights (Judiciary) hearing on the Google-DoubleClick deal. The bottom line: Chairman Herb Kohl said there were no clear winners. Microsoft said the deal was bad as it would allow Google to control all online advertising. Google said that wasn't true, as DoubleClick doesn't sell advertising. It helps advertisers place ads and tracks them for effectiveness. The Electronic Privacy Information Center said Google needs stronger privacy protection for consumers as a condition of the deal. Google said the company expects the deal to be approved without conditions. All of these are predictable positions. The subcommittee, of course, has no jurisdiction in approving or disapproving the deal. That's up to the Federal Trade Commission.
The hearing details and witness statements are here, complete with broken links to the webcast.
September 26, 2007
Amazon Opens Music Store In Style
Amazon's online music store is launching today and getting quite a bit of press attention. It's not merely that Amazon has the heft to compete with the iTunes store, but the deal that it's offering. According to press reports, Amazon will offer 2 million mp3s encoded at 256 KB for 89 to 99 cents each. Amazon also figured out a way to make sales available to iPod owners using the iTunes software to get Amazon store songs on the iPod. The move is backed by Universal Music who continues to sell through iTunes on an at will basis. The most amazing part is that the music will be DRM free, at least through January, 2008 for the Universal downloads. That company is experimenting to see if DRM free tracks increases sales.
The odd part in all of this is Universal is doing something Apple wants to do (drop DRM from tracks) at a lower price than Apple charges. That's the even stranger part when you consider that Apple and Universal fought over pricing. Universal wanted higher prices for newer songs and lower prices for older songs compared to the 99 cent flat fee. Apple has since gone to a higher price for DRM free music from EMI. The willingness of Universal to undercut Apple in spite of its own statements is remarkable. They really do want to create a viable option to the iTunes/iPod structure.
The big loser in this is probably going to be Microsoft. Who needs WMA restricted files when unrestricted MP3s are available. They play for sure on all players. We'll, maybe not older Sony players. But even they came around when their new models dumped their proprietary format. The development is short of amazing given the stance of the music labels on DRM and pricing.
NY AG Investigate Facebook Over Minor Safety
Facebook is under the scrutiny of the New York Attorney General's Office for failure to implement safeguards for minor users of the site. Office investigators posed as minor teenagers on the site. They were solicited for sex and were able to access pornographic pictures and movies. A Reuters report indicates that AG's office has sent subpoenas to Facebook as part of its investigation into safety practices.
September 24, 2007
Apple Patch Said to Cripple Unlocked iPhones
Apple and AT&T have responded to the efforts to unlock the iPhone and liberate it from the AT&T network. Apple plans to issue a software update that ads a WiFi link to song purchases at the iTunes store. Apple warns that the update will irreparably wreck an unlocked iPhone. No warranty service will protect customers if this happens. AT&T will not service any unlocked phones no matter what the circumstances. Unlocking an iPhone violates the warranty as far as both companies are concerned.
The Apple approach is the same strategy the company follows when someone successfully breaches its DRM system for music files. That goes back and forth, though. A breach occurs, Apple patches the software to eliminate the breach, and someone finds a way to get around that, and so on. AT&T on the other hand has a slightly different problem. They may not service an unlocked phone, but they still don't get the benefit of the 2 year contract they would have had if the customer had activated the phone. Apple still gets the hardware sale no matter what.