Hollywood vs. 2600.com
Calvin Reid -- 9/4/00
The MPAA lawsuit may affect free speech, copyright and the future of digital distribution
A lawsuit pitting media giants and intellectual property owners against a Web journalist, programmers and cyberspace free speech advocates will likely serve as the legal battleground for a fight to define the constitutional limits of copyright, fair use and free speech in cyberspace. In mid-August, U.S. District Court Judge Lewis Kaplan rejected defense claims made by Eric Corley, a publisher and Web journalist, who is being sued by the Motion Picture Association of America to prevent the dissemination of a software program that can disable the encryption that prevents movies distributed on DVD disks from being copied. Kaplan's ruling let stand an injunction that prevents Corley from posting or providing hyperlinks of the DeCSS program to other Web sites where the program or its code can be obtained.
Corley's attorneys will appeal the ruling, and both parties expect that the Supreme Court will ultimately have to resolve all the issues.
A journalist who publishes a magazine (2600 Quarterly) and operates a Web site (2600.com) focused on hackers and their subculture, Corley, who also writes under the name Emmanuel Goldstein, was sued by the MPAA and others (including Time Warner) over the posting of DeCSS on 2600.com. The program was originally written by Jon Johansen, a Norwegian 16-year-old, to remove the movie industry's Content Scrambling System so that DVD movies could be viewed on digital movie players using the Linux operating system. The suit was filed in January by the MPAA, which cited section 1201, a controversial provision under the 1998 Digital Millennium Copyright Act that prohibits the circumvention of digital copyright protection.
But Kaplan's ruling has the community of cyberspace free speech activists, hackers and computer programmers in an uproar. The judge's decision appears to fly in the face of accepted Net culture by seemingly proscribing the ability to reverse-engineer software programs in order to write better code. Many cyberspace activists, including the Electronic Frontier Foundation (www.eff.org), claim the decision will chill technological innovation because of fear of liability under the DMCA. Martin Garbus, well-known publishing and copyright lawyer, of the firm Frankfurt, Garbus, Klein & Selz, acting as the lead defense attorney to Corley, also claims that the DMCA is unconstitutional because the statute's ban on circumventing encrypted copyrighted material prevents fair
Copyright owners believe section 1201 of the DMCA is absolutely critical to the future of secure digital distribution via the Internet. The ease of digital distribution of pirated copies at the click of a mouse is the number one fear of all intellectual property industries. And while the Association of American Publishers is not a party to the MPAA's suit, Judy Platt, a spokesperson for the AAP, told PW in no uncertain terms that the AAP supports Kaplan's interpretation of the law: "We're not directly involved, but we're delighted with the ruling."
In his ruling, Kaplan said that computer code is functional ("DeCSS is principally a means to make a machine perform tasks") as well as being expressive (and therefore protected speech), but he placed greater weight on its functionality. "Computer code is not purely expressive," Kaplan stated, "any more than the assassination of a political figure is purely a political statement." He described statute 1201 of the DMCA as a "very narrow" and "content neutral" regulation of DeCSS's functionality that "d s not unduly restrict expressive activities." He dismissed claims that it violates fair use, noting that "many fair uses may be made without circumventing CSS," and stated that the statute also contains "an exception for good faith encryption research." Kaplan also rejected First Amendment claims about restricting linking by pointing to evidence that "defendants linked to sites posting DeCSS, knowing that it was a circumvention device. Indeed, they initially touted it as a way to get free movies."
Garbus told PW, "The judge was right when he said in his decision that only Congress or the Supreme Court can decide this issue. The judge's First Amendment analysis is wrong. Kaplan's decision, if allowed to stand--and it will not--would cripple the free exchange of information on the Internet. It would, by interfering with free linking, stop one of the greatest hopes for the Internet. We expect to be in the U.S. Supreme Court by February."
Mark Radcliffe, an attorney at Gray Cary and an expert on digital copyright, told PW that this case, along with suits (also supported by the AAP) against the file-sharing program Napster, will likely shape the legal future of digital distribution. Radcliffe explained, "There's a reasonable chance that the Supreme Court will take the case. It is tremendously important to publishers that the anticircumvention statutes be enforced. Everyone knows there's no such thing as bomb-proof encryption."
PublishOne to Focus on Business Info Market
PublishOne has begun pilot testing a new service that will enable producers of business information to sell their content over the Internet or via e-mail. According to company founder and CEO Kirk L vner, the PublishOne service permits print publishers to market their materials through electronic distribution channels without developing an expensive infrastructure. Publishers supply PublishOne with a digital file and the Santa Clara, Calif.-based company will handle such functions as content encryption and hosting, subscription management, customer support and supplying sales reports to its clients. The service will also facilitate secure e-commerce transactions. "We are in the service business. We're not a retailer," L vner told PW.
L vner is initially targeting business information publishers for the service, like newsletter and journal publishers as well as market research and market data firms. Among the participants in the test are Yankelovich Partners, VNU's Trade Dimensions, American Lawyer Media and Esther Dyson's Release 1.0 newsletter. L vner said business book publishers may also be able to take advantage of the service to market pieces of information over the Web. L vner said that while PublishOne has the capability to work with e-book publishers, the company will wait until better readers are available for that market.
Publishers are responsible for developing their own content, which can be "sliced and diced" any way they want, L vner noted. Pricing is also left to the publishers. They can sell content directly off their own site, or PublishOne can distribute the materials to a publisher's e-mail list or lists. The company is also currently in discussions with several Internet companies to develop a syndication option for its clients.
When the service g s live later this year, PublishOne will offer a number of pricing packages. The average cost is estimated to run about $249 per month, which includes management and transaction fees. There will also be a one-time sign-up charge. The company is using Adobe technologies to support the distribution and sale of PDF files over the Internet, and has reached an agreement with InterTrust to use its digital rights-management technology as the basis for its online service.
PublishOne was founded in 1999 by L vner, who previously had been president and CEO of Internet Shopping Network and also held management positions with Silicon Graphics and Apple. Initial investors include Marc Andreessen, cofounder of Netscape; Pierre Omidyar, chairman and founder of eBay; Eric Schmidt, chairman and CEO of Novell; and Jerry Yang, chairman and cofounder of Yahoo.
McGraw-Hill Launches E-bookstore
Only MHC titles will be sold through the site, mainly in the business and general reference areas, although some computer book titles will also be offered, said Bob Bolick, v-p and director, new business development for the M-H professional book group. By next year, Bolick hopes to sell 300 new titles annually in e-book format. Initially, prices for the e-books will be the same as for the print editions, although that may change. "We want to test the pricing and see what kind of value consumers put on e-books," Bolick said. The company is also looking at offering original e-books via the site, possibly before the end of the year, he noted.
MHC will promote the e-bookstore through cross linking with other sites, and Bolick said a major factor in establishing its own store "was to provide a place where consumers can find e-books if they are not available through other outlets. We want to put as many e-books out in as many places as possible to get the e-book market going."
Consumers with Adobe Acrobat 4.05 can download the titles directly from the MHC site onto desktop or laptop computers. The titles are also available in Glassbook, Rocket eBook and PDA formats, although in choosing those formats, readers will need to leave the MHC site. Bolick said he hopes to be able to offer those formats directly from the site soon.
BISG E-Publishing Panel
The Book Industry Study Group is bringing together a group of e-publishing executives for the Autumn meeting of its New Technology Interest Group, scheduled for September 20 in New York City.
The meeting will feature five 15-minute presentations by a number of executives about their business plans and new initiatives, followed by a question-and-answer period.
The executives scheduled to appear are Tammy Deuster, CEO of Bookface (www.bookface.com); Sean Devine, v-p, sales and business development at iBooks.com; Jonathan Hahn, chair of EBX Working Group (www.ebxwg.org); Scott Searle, founder and chairman of Lockstream (www.lockstream.com); Troy Williams, founder and CEO of Questia (www.questia.com). Charles Benante, v-p electronic commerce at Pearson, will moderate.
The meeting will take place from 2-5 p.m. at the McGraw-Hill Building, 1221 Ave. of the Americas in New York City. Admission is free for BISG members; $50 for guests; $100 for nonmembers. To register, go to www.bisg.org/newtech.html. Deadline for registration is September 12.
Volume 246 Issue 36 09/04/2000